Businesses will tell you that having access to the costs of goods is an essential part of effective stock management, as this information is used within a number of key tasks. Purchasing staff need this to predict costs and ensure that they keep to their budgets when ordering from suppliers, manufacturers need component costs to help value their works orders and accountants use product costs for determining their stock valuations. However unless good relationships with suppliers are maintained, getting actual costs for items can be a struggle for a lot of businesses. This means that a lot of companies have no choice but to rely on obtained averages for their cost of goods when making calculations and reporting on stock.
The problem is that with purchasing costs constantly fluctuating up and down, using averages to determine the cost of goods too often means that businesses are using estimates that are not nearly accurate enough. Using these unreliable estimated costing figures then present numerous negative impacts within the business as purchasing staff start to overspend, stock valuations become inaccurate and reporting becomes distorted with erroneous information. Therefore businesses should look for an efficient way of keeping track of their last costs paid as usually this presents a much more accurate estimate then simply relying on averages.
Greater Estimated Cost Accuracy With OrderWise
Within OrderWise, businesses are already presented with a number of different estimated costing methods that they can use, with the flexibility to customise this for each individual item. As well as ways of calculating various averages, users also have the choice of basing estimates on the last cost paid, last cost of goods ordered, the special cost from their main supplier or even just manually updating this information as and when it is required.
Now this range of estimated costing methods available has been further extended, with the ability to use the Last Positive Transaction cost added in version 11.6 of OrderWise. When this estimated costing calculation is used, the estimated cost of the item will be the last cost of a positive transaction across all stock locations. This includes positive adjustments, transformations, goods in and manufacturing goods in for any built products or by-products.
Thanks to this simple but useful new addition, OrderWise users are provided with even greater choice when determining what stored costs are used as for their estimated costing method. By having the flexibility to choose the option best suited to their processes, businesses can ensure that their stock valuations and reporting are always as accurate as possible.
For more information on OrderWise, you can download our brochures or watch our videos.
To discuss your requirements in more details contact us today on 01522 704083.