Basics

• MicroBiz Cloud uses Perpetual moving average cost to track the value of your inventory.
• Supplier Shipment Cost, Store Transfer In and Beginning Stock Balance cost are all used to calculate the value of your stock - this is tracked for each simple SKU for each store. (Summary valuations for the configurable parent are shown in the inventory tab).
• Transfers Out, Inventory Adjustments and Cost of Goods for sales use the average cost at the time of the transaction for that SKU/Store. 

How Perpetual Moving Average Works:

Example: If you have 6 items left in stock that you had purchased for a total cost of $225.00, your average cost per unit would be $37.50 ($225/6). 

Even if your current replacement cost from your vendor for the next item purchased increased to $38.00, if you sell one your items in stock, the cost of goods in it will be $37.50.  

Assume that you buy and receive 12 more at a cost of 38.00/unit for a total cost of $456.00 (18 x $38.00).

The total value of your inventory for the 18 items not in stock is $681.00 ($225.00 + $456.00).  The average cost of your existing stock is now $37.83  ($681.00 divided by 18 pieces).

What Happens if there is no Vendor Shipment,Transfer In or Beginning Stock Balance?

If there is no inventory or only an adjustment in - since there is no existing average cost we use whatever the replacement cost is at the time of the transaction.

Note that changing the replacement cost does not change the cost in an existing transaction.

Vendor Shipments and Late Arriving Cost

You can edit open vendor shipments if the cost on the invoice is different than the existing replacement cost.  You will be prompted on whether you want to 1) receieve the shipment at the adjusted cost but not update the replacement cost in the product record, or 2) receive and update the replacement cost. Existing transactions subsequent to the shipment are not corrected for this change).

How Can I change the Current Average Cost if I think its wrong?

Option One:

• Go to the product record>Inventory tab and update the Average Cost field.

Option Two

• Adjust out all the existing stock using Inventory Adjustment.
• Change the replacement Cost
• Adjust it all back in at the new Cost

How Can I change Cost of Goods on an Existing Sale?

• The only way is to  return the sale after the average cost has been corrected and resell it - but the sale will move to a different date.