Perpetual Inventory

Introduction

Wavelet Management Suite uses Perpetual Inventory, where Inventory value and cost of goods sold are continuously updated whenever items defined as inventory items are received or released from stock.

Inventory Items

The below item types are identified as inventory items :

• Inventory
• Non-inventory
• Batch and Expiry
• Coupon
• Decimal Item

Valuation Method

Wavelet Management Suite uses Moving Average (MA) to calculate the average cost of an item.

Moving Average formula : 

( ( Current Moving Average Cost * Current Balance Quantity ) + ( New Transaction Price * New Transaction Quantity ) ) / ( Current Balance Quantity + New Transaction Quantity )

Note :

• Moving Average Cost is calculated by company. Thus, the Moving Average Cost for an item will be the same across the entire company.
• Transactions that will cause recalculation of Moving Average Cost :
  • Goods Received Note
  • Purchase Return
  • Stock Adjustment
  • Trade In
  • Sales Return ( if it's configured to use Invoice MA Cost )
• Transactions that consume the Moving Average Cost :
  • Invoice
  • Sales Return ( if it's configured to use Current MA Cost )

Sample Moving Average Cost calculation for Item1 in CompanyA :