Understanding Stock Valuation Methods (FIFO, Average, Standard)

Stock Valuation in InvenPro

InvenPro supports three valuation methods. The method determines how the cost of goods sold (COGS) is calculated when stock is consumed.

1. Weighted Average Cost (Default)

The system calculates a running average cost each time new stock arrives. Most common for Myanmar SMEs.

Example: You have 10 units at 1,000 MMK. You receive 10 more at 1,200 MMK. New average = 1,100 MMK.

2. FIFO (First In, First Out)

The oldest stock is consumed first. Best for perishable goods or items where cost fluctuates significantly.

3. Standard Cost

A fixed cost is set per product regardless of purchase price. Variances are posted to a variance account. Used in manufacturing environments.

Changing the Valuation Method

1. Go to System → Settings → Inventory
2. Select your preferred method
3. Note: Changing the method mid-year affects your financial reports. Consult your accountant before switching.

Stock Valuation Report

Go to Reports → Stock Valuation to see the total value of all on-hand inventory at any date, broken down by warehouse and product category.