Control of water losses is one important aspect of good water management. However, not all losses matter, and some are unavoidable. Many factors interact to determine the level of water losses, typically leading to very site-specific analysis. This paper discusses water losses in irrigated smallholder production systems, and raises the key issues concerning their control or minimisation. It explores the importance of different categories of loss, the significance of timing of losses, and the causes of losses. A rational analytical framework is proposed, in analogy with financial accounting and auditing, for identifying, quantifying, and evaluating the significance of losses, and arriving at a programme of remedial action where appropriate. The final sections of the paper draw some general conclusions about losses in different types of scheme, and make recommendations for relevant research.