Inventory Management: Stocktaking, Stock Valuation, and Price Management

Important Inventory Fields

1. Purchase Price / purchase_price:
   • Represents the original purchase price of a product, or the manually overridden price.
   • Used as a reference when creating a product or resetting the purchase price.
2. Average Purchase Price / average_purchase_price:
   • A dynamic field that calculates the average of all purchase prices based on historical stock updates.
   • Updates automatically whenever a new purchase price is added during a stock adjustment.

Inventory Scenarios

1. Creating Products

• Purpose: Adding a new product to your inventory.
• Behavior:
  • The editor prompts you to enter a purchase price.
  • This value is saved as the Purchase Price, since no average has been calculated yet.
  • The Average Purchase Price field isn't used at this stage.

2. Stock Updates

• Purpose: Adjusting stock levels during stocktaking or when goods are received.
• Behavior:
  • The stocktaking modal includes a field for entering a new purchase price.
  • This new price:
    • Is factored into the Average Purchase Price calculation and updates it accordingly.
    • Does not overwrite the original Purchase Price.
  • The Average Purchase Price becomes more accurate over time, since it reflects the actual cost history.

3. Editing Products

• Purpose: Viewing or adjusting existing product details.
• Behavior:
  • The editor displays the Average Purchase Price as a reference.
  • The Purchase Price field is disabled to prevent accidental changes.
  • If the Purchase Price needs to be adjusted, an icon button opens the Reset Purchase Price modal:
    • This modal shows the current Average Purchase Price.
    • The user can enter a new price, which is saved as the new Purchase Price and overwrites the calculated average.

Inventory During Stocktaking

During stocktaking, the system uses the following fields:

1. Average Purchase Price (Average Purchase Price):
   • Shown in reports for financial insights.
   • Provides a reliable basis for valuing stock, since it accounts for all previous price adjustments.
2. Actual Stock (physical count):
   • Recorded during the physical stock count and entered in the stocktaking template.
   • Used to compare expected stock against actual stock.

Practical Workflow for Stocktaking

A. Stocktaking Process

1. Download the stocktake list:
   • Includes the Average Purchase Price for each product.
   • Shows the system's expected stock.
2. Count actual stock:
   • Physically count the items in your storage.
   • Record the data in the stocktaking template.
3. Update stock data:
   • Upload the updated template back into the system.
   • If a new purchase price is entered in the stocktaking modal, the system recalculates the Average Purchase Price based on the new data.

B. Calculating Stock Value

The system can calculate the total stock value using the following formula:

Stock Value = ∑ (Actual Stock × Average Purchase Price)

• Actual Stock: The physical stock count entered during stocktaking.
• Average Purchase Price: Dynamically updated by the system to ensure accuracy.

Purpose:

• Provides an up-to-date, accurate valuation of your current stock.
• Useful for financial reports, tax filings, and performance analysis.

Summary of Field Usage in Stocktaking