- MicroBiz Cloud uses Perpetual moving average cost to track the value of your inventory.
- Supplier Shipment Cost, Store Transfer In and Beginning Stock Balance cost are all used to calculate the value of your stock - this is tracked for each simple SKU for each store. (Summary valuations for the configurable parent are shown in the inventory tab).
- Transfers Out, Inventory Adjustments and Cost of Goods for sales use the average cost at the time of the transaction for that SKU/Store.
How Perpetual Moving Average Works
- If you have 6 items left in stock that you had purchased for 37.50 your inventory value = $225.00
- Even if your replacement cost for a new shipment is 38.00 if you sell one your cost of goods will be 37.50.
- If you receive 12 more at a cost of 38.00 you now have 18 at a cost of $456.00.
- The total value of your inventory for this item is $225.00 + $456.00 which equals $681.00
- The average cost of your existing stock is now $37.83 ($681.00 divided by 18 pieces).
What Happens if there is no Supplier Shipment,Transfer In or Beginning Stock Balance?
- If there is no inventory or only an adjustment in - since there is no existing average cost we use whatever the replacement cost is at the time of the transaction.
- Note that changing the replacement cost does not change the cost in an existing transaction.
Supplier Shipments and Late Arriving Cost
- You can edit completed supplier shipments if the cost on the invoice is not what you expected when you received the shipment - however existing transactions subsequent to the shipment are not corrected for this change (on the future features list).
How Can I change the Current Average Cost if I think its wrong?
- Adjust out all the existing stock using Inventory Adjustment.
- Change the replacement Cost
- Adjust it all back in at the new Cost
How Can I change Cost of Goods on an Existing Sale?
- The only way is to return the sale after the average cost has been corrected and resell it - but the sale will move to a different date.