Stock valuation

Overview

Stock valuation shows what your stock is worth at cost, how each unit's cost is worked out, and how fast your stock turns.

The Stock valuation page

Stock is usually your biggest asset, and the hardest to value. Stock valuation works it out from every receipt, transfer and landed cost, then shows how hard that money is working: turnover, days of inventory, return on stock, and what is dead or ageing. Its numbers feed the Stock value, Inventory health, COGS and gross margin and Ageing by receipt batch reports, and can be added to your own dashboards. It is enabled per company.

The page shows what your stock is worth and how hard it works: stock value, turnover, days of inventory, return on stock, dead and aged stock, month-end value, and value by ABC class and by age.

How cost is worked out

• Each item has an average cost per warehouse, moved by every receipt (at the purchase order price, before GST) and every transfer in.
• Choose weighted average (default) or FIFO (first in, first out) in Settings → Stock → Valuation and accounting. The change applies to units leaving from then on.
• Every unit leaving stock carries the cost it left at, so you get cost of goods sold per order line and per order at dispatch. A customer return comes back at the cost it left at.
• Units with no cost are counted, never guessed. You can choose to estimate COGS for sales made before a cost was entered.

Setting costs

Units that came in before you used purchase orders may have no cost. To fix them:

1. 1On Stock valuation, open Set costs (CSV) and download the list of stock without a cost.
2. 2Fill in the cost per unit for each SKU and warehouse.
3. 3Upload the file. O2M shows what it will change, then saves.

Landed cost

A landed cost adds what it cost to bring goods in (freight, duty, insurance, handling, clearing) to the value of those goods.

1. 1Open a received goods receipt and click Add landed cost.
2. 2Enter the charge, the bill number (optional) and its GST.
3. 3Choose how to spread it over the lines: by value (units × cost) or by units.
4. 4Save. The share for units still on hand raises their cost; the share for units already sold goes to COGS.

With the setting on, a charge can also be entered on a purchase order before the goods arrive (each receipt takes its share), or one bill can cover several receipts. A landed cost can be undone.

Valuation reports

• Stock value: at the start and end of a period, and what came in and went out.
• Inventory health: each item's value, cover, turnover, ABC class and whether it is dead stock.
• Ageing by receipt batch: units on hand by the arrival they came in with, oldest first.