Recalculate Cost Prices - Stock Control

As you approach the period-end the pressure of transaction generation often means the entry of purchase information lags behind the entry of sales details. This doesn’t affect the quantities recorded for demand etc or the update of FIFO costs but it can affect the calculation for cost price where updating on an average basis.

When updating cost on an average basis (see Introduction for formula) the current physical quantity affects the cost value updated. If this has been down dated by a sales transaction that is processed at a later date but entered prior to the goods receipt then the physical quantity recorded by the computer is less than it actually was and therefore the calculated new average cost can be incorrect. This is usually only by pennies (if that) but when there are large swings in cost values it could be more.

This procedure, run after the period end, asks you to confirm that all transactions up to the period end date have now been entered and then processes the transactions in date order calculating and updating average cost as it goes.

This procedure also calculates a period end qty/cost value that allows you to re-run the stock valuation report as at when this process was last run.

On selection you are asked to confirm the date up to which transactions are to be recalculate for, if a period end has occurred since the procedure was last run you are then asked to confirm that all transactions up to that date have been entered.

After confirming these details the system then processes the transactions and offers to reprint the stock valuation report at the date entered.

Notes