https://www.high5software.com//mediawiki/index.php?title=Inventory_Valuation&feed=atom&action=history Inventory Valuation - Revision history 2024-03-28T18:16:31Z Revision history for this page on the wiki MediaWiki 1.35.11 https://www.high5software.com//mediawiki/index.php?title=Inventory_Valuation&diff=1680&oldid=prev Marks at 22:35, 8 September 2011 2011-09-08T22:35:52Z <p></p> <table class="diff diff-contentalign-left diff-editfont-monospace" data-mw="interface"> <col class="diff-marker" /> <col class="diff-content" /> <col class="diff-marker" /> <col class="diff-content" /> <tr class="diff-title" lang="en"> <td colspan="2" style="background-color: #fff; color: #202122; text-align: center;">← Older revision</td> <td colspan="2" style="background-color: #fff; color: #202122; text-align: center;">Revision as of 22:35, 8 September 2011</td> </tr><tr><td colspan="2" class="diff-lineno" id="mw-diff-left-l1" >Line 1:</td> <td colspan="2" class="diff-lineno">Line 1:</td></tr> <tr><td class='diff-marker'> </td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>Inventory Valuation in SME</div></td><td class='diff-marker'> </td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>Inventory Valuation in SME</div></td></tr> <tr><td colspan="2"> </td><td class='diff-marker'>+</td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div><ins style="font-weight: bold; text-decoration: none;"></ins></div></td></tr> <tr><td class='diff-marker'> </td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>SME inventory management is BETTER than both FIFO and averages.  In fact one of our customers just switched all inventory accounting from QB to SME because neither FIFO or averaging gives a complete picture and numbers where off somewhere between $0 to $4.2M, but they did not know until they tracked values in SME only.</div></td><td class='diff-marker'> </td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>SME inventory management is BETTER than both FIFO and averages.  In fact one of our customers just switched all inventory accounting from QB to SME because neither FIFO or averaging gives a complete picture and numbers where off somewhere between $0 to $4.2M, but they did not know until they tracked values in SME only.</div></td></tr> <tr><td class='diff-marker'> </td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"></td><td class='diff-marker'> </td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"></td></tr> </table> Marks https://www.high5software.com//mediawiki/index.php?title=Inventory_Valuation&diff=1679&oldid=prev Marks at 20:44, 8 September 2011 2011-09-08T20:44:27Z <p></p> <table class="diff diff-contentalign-left diff-editfont-monospace" data-mw="interface"> <col class="diff-marker" /> <col class="diff-content" /> <col class="diff-marker" /> <col class="diff-content" /> <tr class="diff-title" lang="en"> <td colspan="2" style="background-color: #fff; color: #202122; text-align: center;">← Older revision</td> <td colspan="2" style="background-color: #fff; color: #202122; text-align: center;">Revision as of 20:44, 8 September 2011</td> </tr><tr><td colspan="2" class="diff-lineno" id="mw-diff-left-l7" >Line 7:</td> <td colspan="2" class="diff-lineno">Line 7:</td></tr> <tr><td class='diff-marker'> </td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>#You order 10 widgets and 5 equipment today for $10 and $100 respectively. (Lot 1)</div></td><td class='diff-marker'> </td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>#You order 10 widgets and 5 equipment today for $10 and $100 respectively. (Lot 1)</div></td></tr> <tr><td class='diff-marker'> </td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>#The next day you order 10 widgets and 5 equipment for $20 and $200 respectively. (Lot 2)</div></td><td class='diff-marker'> </td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>#The next day you order 10 widgets and 5 equipment for $20 and $200 respectively. (Lot 2)</div></td></tr> <tr><td class='diff-marker'>−</td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div>Widget inventory value is $<del class="diffchange diffchange-inline">200</del></div></td><td class='diff-marker'>+</td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div><ins class="diffchange diffchange-inline"># Total </ins>Widget inventory value is $<ins class="diffchange diffchange-inline">300  (10*$10 + 10*$20).</ins></div></td></tr> <tr><td class='diff-marker'> </td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>#You sell 1 widget and 1 equipment.  SME allows you to specify the specific lot used or serialized equipment.  Therefore you get real, true costing.  </div></td><td class='diff-marker'> </td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>#You sell 1 widget and 1 equipment.  SME allows you to specify the specific lot used or serialized equipment.  Therefore you get real, true costing.  </div></td></tr> <tr><td class='diff-marker'> </td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>#Let&#039;s say you select the widget and equipment from lot 2.  SME would deplete the $20 and $200 items.  SME would tell you that the cost of items remaining are 10*$10 + 9*$20 for widgets or $280.  A FIFO system would take the $10 part even though that&#039;s not the one used and tell you inventory value is 9*$10 + 10*$20 or $290, but this is wrong!.  An average system would say the average cost is $15 and say inventory is worth $285, which is also wrong.</div></td><td class='diff-marker'> </td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>#Let&#039;s say you select the widget and equipment from lot 2.  SME would deplete the $20 and $200 items.  SME would tell you that the cost of items remaining are 10*$10 + 9*$20 for widgets or $280.  A FIFO system would take the $10 part even though that&#039;s not the one used and tell you inventory value is 9*$10 + 10*$20 or $290, but this is wrong!.  An average system would say the average cost is $15 and say inventory is worth $285, which is also wrong.</div></td></tr> <tr><td class='diff-marker'> </td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"></td><td class='diff-marker'> </td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"></td></tr> <tr><td class='diff-marker'> </td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>So in summary, SME gives true inventory valuation instead of false accounting information.  Over the long term FIFO and average may work out from an accounting standpoint, but wouldn&#039;t you want to do better with SME?!  Note that you can always run a report in SME to give inventory average numbers if you really want accounting right, but reality wrong numbers!</div></td><td class='diff-marker'> </td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>So in summary, SME gives true inventory valuation instead of false accounting information.  Over the long term FIFO and average may work out from an accounting standpoint, but wouldn&#039;t you want to do better with SME?!  Note that you can always run a report in SME to give inventory average numbers if you really want accounting right, but reality wrong numbers!</div></td></tr> </table> Marks https://www.high5software.com//mediawiki/index.php?title=Inventory_Valuation&diff=1678&oldid=prev Marks: Created page with "Inventory Valuation in SME SME inventory management is BETTER than both FIFO and averages. In fact one of our customers just switched all inventory accounting from QB to SME bec..." 2011-09-08T20:43:24Z <p>Created page with &quot;Inventory Valuation in SME SME inventory management is BETTER than both FIFO and averages. In fact one of our customers just switched all inventory accounting from QB to SME bec...&quot;</p> <p><b>New page</b></p><div>Inventory Valuation in SME<br /> SME inventory management is BETTER than both FIFO and averages. In fact one of our customers just switched all inventory accounting from QB to SME because neither FIFO or averaging gives a complete picture and numbers where off somewhere between $0 to $4.2M, but they did not know until they tracked values in SME only.<br /> <br /> Instead, SME uses ACTUAL costs. It tracks every lot being received and this is necessary for serial number tracking of parts. Now within a single lot, SME will use FIFO, but if one lot is different from another lot, it would use actual.<br /> <br /> For example, you are selling Widgets and Equipment (serialized):<br /> #You order 10 widgets and 5 equipment today for $10 and $100 respectively. (Lot 1)<br /> #The next day you order 10 widgets and 5 equipment for $20 and $200 respectively. (Lot 2)<br /> Widget inventory value is $200<br /> #You sell 1 widget and 1 equipment. SME allows you to specify the specific lot used or serialized equipment. Therefore you get real, true costing. <br /> #Let&#039;s say you select the widget and equipment from lot 2. SME would deplete the $20 and $200 items. SME would tell you that the cost of items remaining are 10*$10 + 9*$20 for widgets or $280. A FIFO system would take the $10 part even though that&#039;s not the one used and tell you inventory value is 9*$10 + 10*$20 or $290, but this is wrong!. An average system would say the average cost is $15 and say inventory is worth $285, which is also wrong.<br /> <br /> So in summary, SME gives true inventory valuation instead of false accounting information. Over the long term FIFO and average may work out from an accounting standpoint, but wouldn&#039;t you want to do better with SME?! Note that you can always run a report in SME to give inventory average numbers if you really want accounting right, but reality wrong numbers!</div> Marks