Note: This feature is limited to users with the Local System Admin role. See Admin: Add/Modify User Roles (Read Time: 1 min) for more information.
For each inventory item, a total inventory value must be set from which average unit cost should be calculated. This is only available if Batch Costing is enabled and is critical for making batch costs generate in your system
- Navigate to Inventory - Overview
- Find the inventory item needing a value (all raw materials, all supplies)
- Click the blue arrow to the right of the item, then the pencil icon to Edit Item
- Toward the bottom of the form, check the box to Adjust Total Inventory Value
- Enter the value of the inventory, or click the blue total cost based on the item supplier
- Save the new value
This has to be done for each inventory item in order to begin calculating a batch cost, but need only be done once.
Once this value is initially set, average unit costs will continue to calculate based off of Purchase Order receipts.
Note: After a Total Inventory Value is set and a user goes to adjust the quantity of the raw material or supply (Item Actions > Adjust Quantity) the Total Inventory Value will remain constant and the Average Unit Cost will be adjusted to reflect the change in quantity which will adversely affect your costing data. Users should be utilizing the Purchase Order feature to ensure the Average Unit Costs of the items are updated accurately.
Note: If the QuickBooks Online integration is enabled, users will also see the option to send the change in value to QuickBooks inventory. This takes the entire difference (100% of the value on the first revaluation) and adds it to the value of the appropriate Inventory account. If the value is already accounted for in QBO, please uncheck this box.
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