This guide explains how to select the stock valuation method in the Netvisor system. Choosing the stock valuation method is crucial for successful stock management and affects the purchase prices of products.

CONTENTS

Selecting the stock valuation method

You can access the stock valuation method settings by selecting Sales > Basic data and settings > Sales basic data.

When stock management is enabled in Netvisor, selecting the stock valuation method is one of the first tasks to be done. The selection is made in the sales basic data under the subheading "Allowance settings" by choosing Manage. This is crucial to ensure the purchase prices of products are correct.

In the window that opens, you can select a new valuation method and set the time of the valuation method change as the beginning of the open fiscal year.

The valuation method can be changed later, but it is recommended to select it right at the beginning. Changing it can cause issues if done in the middle of the fiscal year. Later, the selection can be made from the same place in the sales basic data. The role of user administrator is required to select and change the stock valuation method.

There are three different stock valuation methods available: Running average calculation, Weighted average calculation, and FIFO calculation. The following sections briefly describe what each method entails.

Running average calculation

  • Running average calculation is a stock valuation method obtained by summing the latest and previous purchase together, then dividing the total value of purchases by the total number of products.
  • Costs are calculated based on the running average of units.
  • This unit price is updated for all products in stock as the unit price, and this calculation is repeated whenever a new batch arrives in stock or when stock is reduced at a unit price deviating from the average price at the time of use.

Weighted average calculation

  • Weighted average in Netvisor is a stock valuation method obtained by summing the stock together for the entire purchase history, then dividing this number by the number of purchases for the entire stock history.
  • Costs are calculated based on the weighted average of units.
  • We recommend using FIFO calculation or Running average calculation instead.

FIFO calculation

  • The costs of units purchased first are allocated to the units sold last.
  • The method assumes that the materials and supplies that arrived first in stock are used first.
  • Based on the business income tax law, which strongly affects business bookkeeping, the inventory value must be calculated according to the FIFO method.
  • In FIFO calculation, products are handled batch-wise, and thus it is known from which batch products are taken and from which batch products are in stock at the end of the period. At the end of the period, the newest product batches remain in stock, and the stock value is formed based on the value of these remaining products.

Frequently asked questions

Question: Where can I find the stock valuation method settings in Netvisor?
Answer: You can open the settings by selecting Sales > Basic data and settings > Sales basic data and then choosing Manage under the subheading "Allowance settings".

Question: When should the stock valuation method be selected?
Answer: The method should be selected as soon as stock management is enabled in Netvisor to ensure the purchase prices of products are correct.

Question: Can the stock valuation method be changed later?
Answer: The method can be changed later from the same place in the sales basic data, but changing it in the middle of the fiscal year may cause issues.

Question: Who can select or change the stock valuation method?
Answer: The role of user administrator is required to select and change the stock valuation method.

Question: Which stock valuation methods are available in Netvisor?
Answer: The available methods are Running average calculation, Weighted average calculation, and FIFO calculation.

Question: Which method is recommended?
Answer: The recommended methods are FIFO calculation and Running average calculation.

Keywords: Stock valuation method, running average calculation, weighted average calculation, FIFO calculation, stock management.

This article has been translated using an AI-based translation tool. The contents or wording of these instructions may differ from those in other instructions or in the software.


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