Valuation, movements and low stock
Weighted average costing, the movement ledger, and knowing before you run out.
Stock is valued at weighted average cost in your base currency. Two deliveries of the same item at different prices produce one blended cost, which is what the next consumption is charged against.
The alternative — tracking each delivery as its own batch and consuming them in order — is more precise and much more work at the point of use. Weighted average is the choice that survives a busy Tuesday.
The movement ledger
Every change is a movement: intake, consumption, correction. Quantity on hand is the sum of them rather than a number someone edits, so "why do we have three of these" always has an answer.
This is also why you correct with a movement instead of editing a figure. An editable number tells you what someone believes; a ledger tells you what happened.
Low stock
Set a threshold per item and it surfaces when it drops below.
Set it at the level where you would need to order, not at the level where you would run out. Those are different numbers and only one of them is useful. Threshold = how much you use in the time your supplier takes to deliver, plus a margin for a bad week.
Example
Working out a threshold
- You use about 20 units a week.
- Your supplier takes 10 days — call it a fortnight.
- A fortnight of use is 40 units.
- Threshold 60, not 10. At 10 you are already ordering in an emergency.
Counting
Count physically now and then and record the difference as a correction. Every stock system drifts; the ones that stay useful are the ones somebody reconciles.
Common questions
- Why does my valuation not match what I paid most recently?
- Because it is an average across everything you hold, not the price of the last delivery. That is the intended behaviour.
- Can stock be linked to a treatment?
- Consumption is recorded against the item. Automatic deduction when a service is performed is not wired up today.