Basics

• 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).

• Adjust out all the existing stock using Inventory Adjustment.


• Change the replacement Cost


• Adjust it all back in at the new Cost

• 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.