Inventory valuation and costing

Inventory valuation is the total value of the stock you hold. Fiddle calculates it from your on-hand quantities and the unit cost recorded for each item.

How cost is captured

Each time stock comes in, Fiddle records its cost:

• Receiving a purchase order uses the unit cost on the PO line.
• Completing a work order rolls up component and labor costs into the finished good.
• Adjustments can set a cost when you add found or opening stock.

Costing methods

Your costing method decides which cost is used when stock leaves.

Method	How outbound cost is chosen
Average cost	Blends all receipts into one running average per item
FIFO	Uses the cost of the oldest stock first

Choose your costing method early. Changing it later re-bases historical values and can shift reported cost of goods sold (COGS).

Where valuation shows up

• On-hand value per item = quantity × unit cost.
• COGS posts when you ship a sales order or issue components to a work order.
• Adjustments for damage or loss write down value immediately.

Reconcile valuation after big receipts or counts. A mismatch usually traces back to a PO received at the wrong cost or an adjustment with no cost entered.

Next steps

Keep costs clean at the source — a stock adjustment with the right reason and value keeps your valuation trustworthy.