Average Costing Setup

Use these steps to implement Average costing in the system:

• Select the Post to Journal check box on the General Parameters form to have all transactions which affect inventory post to the G/L Inventory Distribution Journal. Clear the check box to suppress posting to the G/L those transactions which may affect inventory.
• Set the Cost Method field on the General tab of the Items form  to Average for all items. Ideally, you would set this field at the time the items are added to the Items form.
• Set the Cost Type field on the General tab of the Items form  to Actual. The cost type defaults from the Cost Type field on the General Parameters form when adding new items.
• Specify the initial cost of each item into the Unit Cost field on the Item Costs form.
• You can maintain cost details for both unit cost and current unit cost entities. When the beginning inventory balance is entered through the stock adjust transaction, the quantity entered is valued at the cost entered. If an item has no beginning inventory balance, zero may be left in the Unit Cost field for the system to update as the item is received into stock.
• If you have instructed the system to post inventory transactions to the G/L by selecting the Post to Journal check box on the General Parameters form, you must also set up the G/L account numbers which the system uses for this interface.

These account numbers must be entered into the associated codes and parameters for costing purposes: