Inventory valuation
Table of contents
Introduction
Are you interested in keeping track of the inventory value in your warehouse? In Ongoing WMS, you can see a snapshot of the current stock value as well as for a specific day and time.
The stock value is presented as a column named Stock value in the tables on the pages listed below.
- Warehouse ⇒ Articles for a snapshot of current stock value
- Statistics ⇒ Historical stock balance for a snapshot of historical stock value
Stock value calculation
Stock value is calculated for each individual item in stock and then summed per article number in the column Stock value. If an item has an item price specified, the stock value will be calculated using the item count and price.
- Stock value = item count * item price
If the item does not have an item price specified but it was received on a purchase order with a row price specified for the items purchase order line, the stock value will be calculated using the item count and the purchase order line row price.
- Stock value = item count * (purchase order line row price / purchase order line count)
If the item neither a referenced purchase order line have price specified the stock value will be calculated using the item count and the stock valuation price from the items article master data.
- Stock value = item count * article stock valuation price
When an item is withdrawn from stock, e.g. when picking an order, the total stock value will be subtracted with the value calculated for the specific item withdrawn. When picking items on order they are in many cases picked according to FIFO (First in, first out) but many other options exist and the need of handling exceptions from FIFO is common. There also exists other transactions beside of picking affecting the stock so there is often not desirable to have a stock value that strictly follows the FIFO method in Ongoing WMS.
Example
This example will show how stock value is first calculated on item level and then summed on article number level as the stock value is presented on page Warehouse ⇒ Articles and Statistics ⇒ Historical stock balance.
In the table below stock value is first calculated for each item in the warehouse:
| Article number | Inbound date | Location | Count | Item price | Purchase order line unit price | Article stock valuation price | Calculated stock value |
|---|---|---|---|---|---|---|---|
| 1111 | 2023-01-01 | A-1-1 | 10 | 3 | 2 | 1 | 10 * 3 = 30 |
| 1111 | 2023-01-02 | A-1-2 | 10 | 2 | 1 | 10 * 2 = 20 | |
| 2222 | 2023-01-03 | A-4-1 | 10 | 4 | 10 * 4 = 40 | ||
| 2222 | 2023-01-04 | A-4-2 | 10 | 5 | 4 | 10 * 5 = 50 | |
| 3333 | 2023-01-04 | A-10-2 | 10 | 6 | 10 * 6 = 60 | ||
| Total: 200 |
In the table below the stock values from the item rows above have been summed and shown as total stock value with one row per article number:
| Article number | Count | Calculated stock value |
|---|---|---|
| 1111 | 20 | 30 + 20 = 50 |
| 2222 | 20 | 40 + 50 = 90 |
| 3333 | 10 | 60 |
| Total: 200 |
Best practice
When using Ongoing WMS for calculating stock value best practice is to use purchase orders and specifying the cost price as Row Price on each purchase order line. For items added to stock with no reference to a purchase order, e.g. items found when during stock-taking, best practice is to have a specified stock valuation price in the article master data.
Setup
If the column Stock value is not visible in your Ongoing WMS account, you need to display it by adding/altering a setting. See this guide for information on how to change columns. Please contact Ongoing if you need help altering columns.