Automatic Cost Updates

Settings

General Settings > Items & Inventory > Setup Cost Update

  • Transaction Type - From which the Costs will be updated

  • Update - Options include :

    • Supplier Price (Matching Supplier, Currency and Unit)

    • Supplier Price (Matching Supplier)

    • Supplier Price (All Suppliers and Prices) - Updates Supplier, Price, Currency, Roe (If Override = True)

    • Cost Price (All Units),

    • Cost Price (Same Unit),

    • Inventory (Last Price),

    • Inventory (Ave. Price),

    • Inventory by Location (Ave Price)

  • Status - The Status which will trigger the Update

Weighted Average Costing

When Goods are received, the cost of Inventory items are updated to the new average price which is calculated based on the cost of existing items and the cost of the new items. Basically you total the value of existing stock add it to the total value of the new stock and then divide it by the new Qty in stock. For example:

Existing Stock - Qty = 10, Unit Cost = R100.00; Total Value = R1,000.00

New Order - Qty = 10, Unit Cost (incl. Landing Cost) = R120.00; Total Value = R1,200.00

New Unit Cost (The average cost of all the Stock including the existing and the new)

(R1,000.00 + R1,200.00)/ 20 (Total Qty) = R110,00 ea

Notes

It is assumed the Transaction which updates the Stock Price (usually a Goods Received transaction) is the first transaction of the day - existing Stock is calculated up until the end of the previous day.

All the same items on the GR transaction will be summed when calculating the Weighted Average Costing. (In case there are multiples of the same item on a GR)

The Auto-update field needs to be checked for Stock items to be updated.