Most Recent Cost in Inventory

Post date: Feb 20, 2018 3:25:47 PM

Each item in inventory carries a 'Most recent cost', which is used in several ways.  If an ACCRUED (i.e. not expensed) inventory item is shipped but has NO actual cost (i.e., there is nothing in any cost bucket), then the 'Most recent cost' is used for the Cost of Goods Sold (expense) transaction.  The 'Most recent cost' is not NECESSARILY the last purchase cost of the item, because there are several functions that use it for other purposes, and because there are also several functions, aside from actual receiving and invoicing, that can update it.  The only way to get the accurate last purchase cost of an item is to look at the AP invoice for the last purchase of that item.  'Cost buckets' may not be accurate: If it's an EXPENSED item, then there will be no 'cost buckets' for it, and even if it's an ACCRUED item, depending on how many of the item have been used, the remaining cost buckets might not be from the last purchase.

These are the functions that can update the 'Most recent cost' on an item:

1) When inventory receipts are POSTED, the 'Most recent cost' is updated on the received items. 

2) When a PO invoice batch is posted - if an adjustment to the cost needs to be made (i.e., if the vendor's invoice reflects a different cost than the receipt indicated), then the 'Most recent cost' is updated on the invoiced item(s).

3) When an estimate is prepared in order entry, and the user manually enters an 'estimated' cost on an item, that estimated cost is also saved as the item's 'Most recent cost'.

4) When an item is created from a line in order entry, IF an 'estimated cost' was entered for that item, then when that item is created, the 'estimated cost' will be stored on the new item as the 'Most recent cost'.

5) When an item is created from the 'Direct Entry' function (in order entry), the 'unit cost' gets stored on the new item as the 'Most recent cost'.

6) From the 'Physical Inventory Variance' report, an item's 'Most recent cost' can be manually updated.

7) From the 'IC Edit Items' function, where items are created, edited, and deleted, the 'Most recent cost' can be updated manually.