Inventory price and valuation methods

A valuation method is assigned to products of the product types goods and material via the product groups. This can be configured differently at the top level for all goods or for individual product groups.

Valuation methods are used to correctly map costs so that income and sales can always be set in the desired relation. We can currently calculate three different valuation methods:

• Moving average

• First in, First out (Fifo)

• Last in, First out (LiFo)

The valuation method can no longer be changed after the initial creation of a product!

Due to the goods movements from the order, goods receipt and invoicing, we generate the stock price for each individual product in the background, which always ensures that the correct costs are calculated for all products in the stock price field.

Newly created products receive the purchase price from the supplier price table, that of the standard supplier, or that of the first valid other supplier as the stock price until the first stock movement. This is done in order to maintain a basis for calculating sales prices on products, offers and orders, regardless of whether the product has already been purchased.

Stock prices in products that are made up of a bill of materials are totaled.

Inventory prices of products are also displayed in quotations and orders and can therefore represent a calculation of cumulative inventory price to sales price. This makes it possible to make a statement about the revenue of an individual order and quotation at the line level of individual products. This requires proper data maintenance.

Overall, inventory prices can be read out via data sources for use in reporting. Typical reports here would be Revenue per product, per sales order over time; inventory price to sales prices over time; quantities product sales to cost of goods sold.