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Valuation Methods & Accounting Integration

Inventory Valuation

Configure on the Product Category. Go to Inventory > Configuration > Product Categories, select a category, edit the Inventory Valuation section.

Valuation Methods

Method Description
Standard PriceFixed cost assigned to the product. No automatic recalculation. Variance is tracked.
Average Cost (AVCO)Weighted average of all purchases. Updated on each receipt.
FIFO (First In First Out)Oldest stock cost is used first. Each unit has its own cost layer.

Accounting Valuation

Setting Behaviour
Manual / PeriodicNo automatic journal entries. Run inventory adjustments to post valuation.
AutomatedEvery stock move creates accounting entries automatically. Requires a dedicated Inventory Valuation account.

Inventory Valuation Report

Go to Inventory > Reporting > Inventory Valuation. See the current value of each product at each location. Columns: Quantity, Unit Cost, Total Value. Also shows layered cost history.

Stock Moves as Accounting Entries

With Automated Valuation, each stock move generates:

  • Receipt: Debit Inventory, Credit Stock Input (or directly Credit Vendor if not separate).
  • Delivery: Debit Cost of Goods Sold (COGS), Credit Inventory.
  • Scrap: Debit Inventory Loss, Credit Inventory.

Review entries via: Product → Accounting → Journal Entries.

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This documentation is updated continuously. Some features described here may be renamed, deprecated, or still being finalized.