Hi All,
Can somebody please shed some light on this. I may be missing something obvious.
I would like to clarify how Square works when we change the cost price for an item.
Our real life example. We have an item with a cost price of $97.06. There is 1 available. When we purchase one more item from the supplier the cost went up and we enter $119.63 into Square. If both these units are sold on the same day then the COGS report shows COGS of $216.89 which is the sum of both costs. Seems logical, Square is taking into account the different cost prices when sold.
However we ran a test final stocktake BEFORE the two items were sold and counted 2 as the correct quantity for this item. Square then calculated inventory value on hand of $239.26 which is double the last cost price of $119.63 rather than the expected sum of both the costs as per above example using COGS report.
Why is this? It just doesn't seem accurate. If we had an item with x 100 available units and the cost price was $50 (total cost $5000) but then the supplier doubled the price overnight to $100 and we purchased another 10 meaning (total cost $1000) we now have 110 available units which cost us $6000. However I assume when we perform the end of year stocktake Square would record the inventory value on hand of $11,000 (110 x $100) using the last cost price entered rather than the expected value of $6000 (100 x $50) + (10 x $100) using a mix of cost prices like the COGS report.
Am I missing something here? Why does Squares stocktake inventory value on hand not use the same method as the COGS report when items are sold. Any advice would be appreciated.
