We are currently using average costing of our inventory using erpnext.
As we check for the average cost of our inventory, we noticed that the average cost of our inventory keeps on changing upon sale of the item… then, we realized that when an inventory was delivered(for serialized items), the cost it is getting is from it’s original price, thus affecting the computation of average cost in the stock ledger.
Please see below example of item wherein the average cost of the item keeps on
changing during the delivery of items…
Kindly note that the inventory cost per unit should only change following an inventory
purchase, but not after an inventory sale.
In the screenshot above, the valuation rate for this item should still be 577.89 from
oct 17 to dec13, the cost of the item should only change upon purchase on dec14. In this regard, we suggest to have a report showing the the average cost of inventory as we have mentioned.
Currently system maintain original purchase cost of each serial no and on delivery it reduces stock value by the original cost. In this way, system gives more accurate value of available stock value.
Anyone have any better suggestion or other views, please reply.
If original cost is maintained in delivery of items, that only shows that the valuation used for serialized item sold is specific identification and not moving average. while the ending inventory was calculated based on the remaining total stock value divided by the inventory on hand… Below shows the proper way of Moving Average Valuation of Stock(this is true for item with different purchasing price from different suppliers)
