"Short" and "Not settled" — which one is a real problem

Not settled — minus here, fine overall

The size shows a minus at this location, but add up every location and the business total is healthy. The stock is at another one of your places, or a transfer that really happened was never entered. This is paperwork, not a shortage. Nothing is missing; it's recorded in the wrong place.

Short — minus everywhere

The business-wide total for that size and colour is below zero. More has been sold, issued or sent out than the records say ever came in. That is a real one. Usually it's goods that arrived without a purchase or job-work receipt being entered, or the same sale entered twice.

How to fix each

Not settled: record the transfer that actually happened, or correct the count at the location holding the goods.

Short: find the purchase or job-work receipt that was never entered and record it — the figure recovers on its own, and your stock value becomes right at the same time. If it was genuinely miscounted, use ± Stock with a reason so the correction is on the record.

Why they're kept apart

Lump them together and every ordinary transfer looks like a crisis, so the report stops being read at all. Only Short is a shortage, and Short is meant to be rare.