- Periodic Inventory Valuation
In a periodic inventory valuation, goods reception and outgoing shipments have no direct impact in the accounting. At the end of the month or year, the accountant posts one journal entry representing the value of the physical inventory.
At the end of the month/year, your company does a physical inventory or just relies on the inventory in Kiu BMP to value the stock into your books. Then you need to break down the purchase balance into both the inventory and the cost of goods sold using the following formula:
Cost of goods sold (COGS) = Starting inventory value + Purchases – Closing inventory value
- Perpetual Inventory Valuation.
In a perpetual inventory valuation, goods receptions and outgoing shipments are posted in your books in real time. The books are therefore always up-to-date. This mode is dedicated to expert accountants and advanced users only. As opposed to periodic valuation, it requires some extra configuration & testing
- Accounts Receivable/Payable: defined on the partner (Accounting tab)
- Deferred Tax Assets/Liabilities: defined on the tax used on the invoice line
- Revenues: defined on the product category as a default, or specifically to a specific product.
- Expenses: this is where you should set the “Cost of Goods Sold” account. Defined on the product category as a default value, or specifically on the product form.
- Goods Received Not Purchased: to set as Stock Input Account in product’s internal category
- Goods Issued Not Invoiced: to set as Stock Output Account in product’s internal category
- Inventory: to set as Stock Valuation Account in product’s internal category
- Price Difference: to set in product’s internal category or in product form as a specific replacement value