Child pages
  • Inventory management in AccountRight

Versions Compared

Key

  • This line was added.
  • This line was removed.
  • Formatting was changed.
HTML Wrap
classsection group
HTML
<span data-swiftype-index="true">
HTML Wrap
classcol span_3_of_5

Before filling out your inventory, it's important to know whether you'll be using a perpetual or periodical (also known as physical) inventory method. If you already know what you want to use, have a look below for more information on how AccountRight handles each method.

If you're not sure what method works best for your business, don't worry! It's a lot easier than it sounds. This information will help you choose the the best method for your business and give you greater control over managing your stock.

UI Text Box
sizemedium
typetip

Managing a full inventory can sometimes be tricky. The MYOB Inventory Training Course (Australia | New Zealand) is an excellent resource to better understand AccountRight's inventory and its features - helping you stock smarter.

Perpetual and periodical inventory methods

Generally speaking, perpetual inventories, in which the inventory system is automatically updated for each sale and purchase, is used in businesses with high-volume sales where physical inventory counts are time-consuming and costly.

Periodical inventory is usually best for suited for businesses that sell low-volume products, such as cars or artwork, that can easily be tracked by a physical count, or by businesses that already use a third-party POS system to track inventory.

Check with your accounting advisor on whether perpetual or periodical is right for your business. But no matter which method you choose, you'll be able to tailor your AccountRight inventory to make your business life easier.

 

UI Expand
titlePerpetual inventory

Perpetual inventory

When a business uses the perpetual inventory method, they're continually tracking the monetary and physical movement of their stock; so, their inventory balance will always be up-to-date and have less reliance on physical inventory counts.

If you want to use the perpetual inventory method in your AccountRight, you need to make sure you check I Inventory This Item when creating an item.

Item information window with I inventory this item selected

For more information on this process, see Creating , editing and deleting items.

When using a perpetual inventory in AccountRight, your inventory's monetary value is tracked using the average costing method.

Unlike other valuing methods, such as First in First Out (FIFO), the average costing method values your inventory by calculating its weighted average value, using the formula: Average Cost=Total Value of the item÷Total Quantity of items. Let's take a look at an example of how this would work in everyday business.

UI Text Box
sizemedium

Example

Let's say you purchase 10 wine glasses for $10.00 each. This will result in an average cost of $10.00 per item.

The following day, 10 more wine glasses are purchased, this time for $12.00 each. Your inventory looks like this:

  • Total Quantity of wine glasses: 20
  • Total Value of wine glasses: $220.00
  • Average Cost: $11.00 ($220.00÷20)

From this example, you'll notice your average cost rose by $1.00 after purchasing the second lot of glasses. This number will be automatically calculated and updated after each sale and purchase.

UI Expand
titlePeriodical inventory

Periodical inventory

Under a periodical (or physical) inventory method, an inventory balance is recorded only after a physical inventory count.

If you want to use the periodical inventory method in your AccountRight, you need to make sure you do not check I Inventory This Item, but rather I Buy This Item and I Sell This Item when creating an item.

Item information window with I buy this item and I sell this item selected

UI Text Box
sizemedium
typenote

Recording your inventory periodically requires just a few more steps each time a physical stocktake is conducted. For more information on recording a periodical inventory, see Periodical inventory. Before implementing periodical inventory, you should discuss its suitability with your accounting adviser.

 

 

 

What's next?

Once you've decided which inventory method to use, see our Inventory help topic to learn what else you can do and how to set up your inventory items.

HTML
</span>
HTML Wrap
width15%
classcol span_1_of_5
 
HTML Wrap
floatleft
classcol span_1_of_5
Panelbox
namegreen
titleRelated topics
HTML Wrap
classsidebarlinks

Inventory

Periodical inventory

Create detail and header accounts

Recording a journal entry

Enter end-of-year adjustments

Error: Non-zero value

Error: Not enough items on hand to record this transaction

Panelbox
nameyellow
titleFrom the community

RSS Feed
titleBarfalse
max5
showTitlesOnlytrue
urlhttp://community.myob.com/myob/rss/search?q=inventory&filter=labels%2Clocation%2CsolvedThreads&location=category%3AAccountRight&search_type=thread&solved=true

HTML Wrap
classmorelinks
More »