Inventory reconciliation compares your system-of-record inventory balance with the 3PL's actual physical count. Any difference requires explanation — receiving error, outbound error, damage, or shrinkage.
Run reconciliation monthly at minimum. Pull your expected inventory balance from your system (opening balance + received - shipped = expected closing balance) and compare it to the 3PL's count.
Investigate every discrepancy above 1% of inventory value. Small percentage differences compound over time. A 1% monthly shrinkage rate becomes a 12% annual loss — significant for any volume.
Document the reconciliation and get written acknowledgment from the 3PL. A 3PL that accepts responsibility for unexplained inventory differences and credits them appropriately is operating with integrity. One that disputes every discrepancy is not.