Shrinkage
The gap between stock the records say a business has and stock it actually has.
Also called
You will also see this written as stock loss and wastage. Kenyan businesses use these interchangeably in conversation even where the underlying things differ, which is worth knowing when someone tells you what you need.
Where you meet this
Shrinkage is the gap between recorded stock and actual stock. It has several causes that look identical in the figures: theft, breakage, giveaways, sales that were never recorded, and receiving errors. Distinguishing them requires knowing when the gap appeared, which is why counting frequency matters more than counting accuracy.
What it sits alongside
In Kenyan business records shrinkage sits alongside Stock take, Inventory and Staff accountability. The pages for each explain how they connect.
Related terms
Common questions
What does Shrinkage mean in Kenya?
The gap between stock the records say a business has and stock it actually has.
Is Shrinkage the same as stock loss?
In everyday use Kenyan businesses treat these as the same thing. The gap between stock the records say a business has and stock it actually has.
How do I know this information is current?
Tax rules in Kenya change with each Finance Act and with regulations made during the year. Before acting on any figure, deadline or threshold, check the current position on KRA's own website.
Sources
- officialKenya Revenue Authority — Kenya Revenue Authority, checked 2026-09-18