In ConnectBooks, inventory costs are managed using the FIFO (First-In, First-Out) method, which starts when you enter a bill. This method ensures that the cost of the oldest inventory is applied first to any transactions, keeping cost calculations accurate and aligned with how your inventory moves.
How FIFO Works:
Entering a Bill: When you enter a bill, the system records the cost of those items. These costs are then applied to future transactions, with the oldest costs being used first.
Orders: As you sell items, the cost from the oldest available inventory is automatically applied to the order.
Refunds: The system uses the original order’s cost to keep cost tracking consistent.
The inventory detail report would look like this:
Bill 1: Items were bought at $1 cost.
Sales from Order 1: All Items from the $1 bill were sold.
Bill 2: New items were bought at $2 cost.
Sales from Order 2: Items from the $2 bills were sold.
Refund from Order 1: One item from the original $1 batch was returned to inventory.
Next Order: will use the cost from the refund from order 1
Amazon Adjustments/Reimbursements: If an adjustment is tied to a specific order, the original cost from that order is used.
Handling Special Cases:
In cases where the cost of added inventory is unknown, such as refunds or reimbursements that lack an order ID, ConnectStock follows a specific cost hierarchy:
Last Shipped Cost: If available, the cost from the most recent shipped order is used.
Last Purchased Cost: If there are no shipped orders in the system, the last purchased cost is applied.
Null: If there’s no purchase or shipping history, the cost remains null until a bill is entered to establish the cost.
.