What your stock actually cost you

Most small-business software values stock at what the supplier invoiced. That is not the cost: the cost includes getting it here, and it changes every time you buy at a different price.

Two formulas, and you may change your mind

IAS 2 allows first-in first-out or weighted average cost. Elvira does both and lets you switch, which matters because the choice is usually made before anybody knows how the business will actually buy.

• Weighted average: every unit on the shelf is worth the same, recalculated as stock arrives.
• FIFO: the oldest units are sold first, so the cost of sales follows the order you actually bought in.

Landed cost goes into the unit cost

Freight, duty and clearance are part of what the goods cost. Elvira allocates them into the stock rather than leaving them as an expense: by value, quantity, weight, volume or by hand: so the margin on every later sale is right rather than flattering.

And what is not selling

A slow-moving provision writes stock down towards what it will actually fetch, sized either by how long since each item last went out or by months of cover against the rate it really sells. Every item on the list says why it is there.

The counting

• Stock counts, adjustments and issues.
• Batches with expiry, warned about before they lapse.
• Multiple locations, with transfers between them.
• Serial numbers, where each unit has to be followed individually.