Inventory
Stock that costs itself.
Count stock by location, cost it by FIFO or average cost, and post the cost of goods sold from every sale. Reorder points tell you when to buy, and goods received match the bill.
- Stock by locationQuantity and value for every item in every location.
- TransfersMove stock between locations at cost.
- FIFO and average costChosen per item, with the layers kept.
- Cost of goods soldPosted from the movement, not estimated at month end.
What you get
Stock by location
Quantities are held per item and per location, and a transfer between two locations is a movement with its own record.
Costed on every movement
Each receipt creates a cost layer. FIFO or average cost values the stock, and every sale posts the cost of goods sold against it.
Bought when it should be
Reorder points flag the items running short, and goods received are matched to the purchase order and the supplier's bill.
How it works
From the shelf to the entry.
Pick a step to see it. The panel stays beside you while you read.
Each item shows its quantity in every location and the value of what is on hand. Transfers move stock between locations without touching its cost.
Stock on hand
| Item | Toronto | Calgary | On hand | Value |
|---|---|---|---|---|
| HX-200 Widget | 120 | 80 | 200 | 2,500.00 |
| HX-310 Bracket | 40 | 20 | 60 | 480.00 |
| Total | 160 | 100 | 260 | 2,980.00 |
Receive against a purchase order and each receipt becomes a layer with its quantity and unit cost. The supplier's bill is matched to the receipt before it is approved.
HX-200 Widget, cost layers
| Received | Quantity | Unit cost | Layer value |
|---|---|---|---|
| Layer 1 | 100 | 12.00 | 1,200.00 |
| Layer 2 | 100 | 13.00 | 1,300.00 |
| On hand | 200 | 2,500.00 |
Pick the costing method for each item. FIFO takes the oldest layer first. Average cost spreads the value of all layers over the units on hand.
Cost of 150 units sold from HX-200
| Method | Calculation | Cost of goods sold |
|---|---|---|
| FIFO | 100 x 12.00 + 50 x 13.00 | 1,850.00 |
| Average cost | 150 x 12.50 | 1,875.00 |
When the invoice posts, the cost of the units shipped moves from inventory to cost of goods sold in the same transaction, so margin is right the day you sell.
Entry for the sale of 150 units, FIFO
| Account | Debit | Credit |
|---|---|---|
| Cost of goods sold | 1,850.00 | |
| Inventory | 1,850.00 | |
| Total | 1,850.00 | 1,850.00 |
Set a reorder point per item and location. Items at or below it appear in a list, and a purchase order can be drafted from it for a person to approve.
Below reorder point
Stock on hand
| Item | Toronto | Calgary | On hand | Value |
|---|---|---|---|---|
| HX-200 Widget | 120 | 80 | 200 | 2,500.00 |
| HX-310 Bracket | 40 | 20 | 60 | 480.00 |
| Total | 160 | 100 | 260 | 2,980.00 |
HX-200 Widget, cost layers
| Received | Quantity | Unit cost | Layer value |
|---|---|---|---|
| Layer 1 | 100 | 12.00 | 1,200.00 |
| Layer 2 | 100 | 13.00 | 1,300.00 |
| On hand | 200 | 2,500.00 |
Cost of 150 units sold from HX-200
| Method | Calculation | Cost of goods sold |
|---|---|---|
| FIFO | 100 x 12.00 + 50 x 13.00 | 1,850.00 |
| Average cost | 150 x 12.50 | 1,875.00 |
Entry for the sale of 150 units, FIFO
| Account | Debit | Credit |
|---|---|---|
| Cost of goods sold | 1,850.00 | |
| Inventory | 1,850.00 | |
| Total | 1,850.00 | 1,850.00 |
Below reorder point
Under the hood
Every movement leaves a layer.
Stock is a record of movements, and value is derived from them. That is why a sale can post its cost, and why a count can be reconciled to the ledger.
Movements
- Goods received
- Sales shipped
- Transfers
- Counts
Costing
- Cost layers
- FIFO
- Average cost
Entries
- Inventory
- Cost of goods sold
- Stock adjustments
Controls
- Reorder points
- Three-way match
- Approval
Capabilities
What inventory covers
Stock by location
Quantity and value for every item in every location.
Transfers
Move stock between locations at cost.
FIFO and average cost
Chosen per item, with the layers kept.
Cost of goods sold
Posted from the movement, not estimated at month end.
Reorder points
A list of what is short, and a purchase order drafted from it.
Receiving against purchase orders
Goods received matched to the order and the bill.
Stock adjustments
Counts and write-offs with a reason and an approver.
Keep going with the rest.
Accounts payable
Bills coded, matched, approved and paid.
Learn moreGeneral ledger
Always current, with every entry traced to its source.
Learn moreIntegrations
Banks, payroll, payments, CRM and more.
Learn more
Questions
Questions, answered.
What is the difference between FIFO and average cost?
FIFO assumes the oldest units are sold first, so cost of goods sold uses the oldest layer's cost. Average cost spreads the value of all units on hand across them. With 100 units at 12.00 and 100 at 13.00, selling 150 costs 1,850.00 under FIFO and 1,875.00 under average cost.
How is cost of goods sold calculated?
From the movements. When a sale posts, the units shipped are costed from the layers under the item's method, and the entry moves that cost from inventory to cost of goods sold.
Can I hold stock in more than one location?
Yes. Quantities are held per item and per location, and transfers between locations are recorded as movements.
How do reorder points work?
You set a quantity per item and location. When stock falls to it, the item appears in the reorder list, and a purchase order can be drafted for approval.
Cost your stock properly.
Bring your item list and one costing question and we show it on a working ledger.