- Cost recalculation is triggered at the time you reconcile a PO
An item can only have one cost per day across all orders. At the time a PO is reconciled, average cost will be calculated and applied to all orders shipped or unshipped that day. This is the formula used to calculate average cost:
Any of these actions will be checked during a cost recalculation:
Average Unit Cost = (Last Cost * Last QTY + Today's Cost * Today's QTY) / (Last QTY + today's QTY).-
Shipped Orders (newly-calculated cost will be applied to these orders)
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Reverse-ship an order
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Reconcile a PO (calculated as of receive date)
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Unreconcile a PO (calculated as of receive date)
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Returns (product credit)
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Inventory adjustments
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Inventory counts
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Product Assembly
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- Once a date has been locked, it will no longer be possible to edit any closed POs (received and reconciled) from on or before this date.
You will no longer be able to lock dates on the daily batch unless all purchase orders from on or before that date have been received and reconciled. It will no longer be possible to reverse-receive or edit reconciled POs after the date has been locked.
Locking a date means that the cost associated with your shipped orders will be final. Until your date is locked, costs are estimates.
You must reconcile and lock regularly to ensure that your costs are accurate.
- Your cost history will be retained.
Average cost takes effect as of January 2017. Your past data will remain as-is.
- Functionality that edits cost directly will be depreciated.
It will no longer be possible to edit cost on the product profile. Costs entered on your purchase unit profile will feed into purchase orders, but they will not directly edit or match your calculated average cost. Instead, a product's cost may only be updated by inventory transactions. Whenever cost is recalculated, the new cost will be applied to all orders shipped as of the date of the recalculation.
Frequently Asked Questions
- How is cost treated for returns?
Purchase cost as of the date of the return is used for return cost.
- How is cost affected by reverse-shipping an order?
Cost is taken from the actual ship date, not current average cost. The transaction date for the reverse-ship is the ship date.
- What if my product has zero inventory? How does this affect cost?
Any products with zero inventory will have a cost of 0.
- When an assembly is created, what is the cost?
Creating an assembly both decrements components and increments the assembly unit. Assembly cost calculated as a sum of AVCO of components When the assembly is sold, the assembly cost recalculates based on each component average cost for the day.
- How do receiving and reconciliation affect average cost recalculation?
Inventory is incremented on PO receive date AVCO showing on reports is an estimate until the time a date is locked. When closing a date, must receive and reconcile all POs from that date first.
- What happens when closing the daily batch after a partial receive?
You cannot lock a date until all POs have been fully received and reconciled. If you would like to lock date before the second receive date for a partially-received PO, you will need to split the PO into two. Receive and reconcile them separately.
- How do product & inventory imports affect average cost calculation?
We upload a product with a cost on the purchase unit. But you must receive and reconcile a PO to calculate average cost.
- Can cost be manually-edited anywhere in the application?
Cost cannot be directly edited in Orderbot, except when reconciling a PO. The purchase unit cost may be edited, but that cost merely feeds into purchase orders. It doesn't directly update average cost calculations until a PO is received and reconciled.
- What if I check my report before I have locked the date?
All costs displaying on any Orderbot report are estimates if they span a date range after your last locked date. Cost values are not final until your date is locked.