average cost of good

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  • Updated 2 months ago
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Hi there,

I created a list of inventory items and recently noticed that some of them come with an average cost of goods ($10) where others have nothing. 
Result is the P&L is incorrect and I cannot seem to find a way to delete this cost.
For info I don't use the inventory management functionalities and never entered any cost for these items.
Thansk
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Mathieu Thomas

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Posted 2 months ago

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Crabn Gear

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Yes we had the same problem. The average cost is coming from when you enter the bill for this item.
 I have the same problem when I transfer stock from built items over to inventory items the cost comes up different. I have tried everything with no luck. thanks Mark 
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John G, Information Support Analyst

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Hello Mathieu and Mark,

Thanks for asking.

When you activate the Inventories feature Reckon Accounts will keep tabs of the average cost of inventory items you purchase through Enter Bill and Write Cheque functions (and Adjustment Notes for returns).  For opening balances of Inventories and transfers you will need to use the Suppliers > Inventory Activities > Adjust Quantity / Value on Hand function to manually change the quantities and values of the stock.  

Although you can affect the value "Inventory Asset" shows on the Balance Sheet through a General Journal, that transaction will not impact on the independent Inventory module that tracks your stock levels and its average cost.  

When you sell an inventory item Reckon Accounts will remove that number of stock from its Inventory on Hand and transfer its cost of goods sold at the average cost of all purchases of that item to the Cost of Goods Sold account (type: COGS) for calculation of the Gross Profit on the Profit & Loss Report.  


Hope this explanation helps.


regards,
John
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Mathieu Thomas

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Hi John,

Thanks for this, this really helps, 

The thing bizarre is that I only have a few items with an average cost and I have no ideas where it is coming from as I never entered them trough a bill with a cost associated... 

I don't want this to impact my PL so I guess if I bring the value to 0 then the average cost will return to ?
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John G, Information Support Analyst

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Hi Mathieu,

Go to Lists > Item List, right click one of your items and select FastReport.  Change the Dates field to All to see all transactions that have been made for this item.  Click on an entry in the Report to see the transaction detail.  

Hope this provides some insight to what has happened.


regards,
John.