How a purchase changes what a material costs
Every material carries two costs. They answer different questions, and a purchase moves only one of them.
- Actual cost is what the material cost you. Each receipt blends into it.
- Production cost is the figure you set on purpose. Cost-based price lists and planned product costs are built from it, so purchases never move it.
See how a receipt blends in
Section titled “See how a receipt blends in”Say Lumen & Fern holds 100 kg of soy wax at an actual cost of $4.00 per kg. A delivery of 100 kg arrives at $5.00. The actual cost becomes $4.50: the new units are averaged with what was already on the shelf. The price on the order line is converted into the material’s own unit and cost currency first, so an order in pounds for a material you cost in dollars needs an exchange rate. Set rates in Settings → Currency.
The material card shows both: Actual cost and Production cost. If the actual cost was blended from an incomplete basis, it says Partial basis and names what is missing, so you do not trust a figure that understates.
What a receipt does not count
Section titled “What a receipt does not count”- Defective units. Only the good quantity enters stock and the average. See Receive goods.
- Samples. A line marked Sample arrives held and never moves the average. See Buy a sample without changing a material’s cost.
- Reclaimed charges. Freight and duty you add later are spread over the goods, but the part you claim back, such as import VAT, never reaches the cost. See Add freight and duty to what you paid.
Bring the production cost up to date
Section titled “Bring the production cost up to date”When the actual cost has drifted from the production cost you set, click Adopt actual on the material card. It copies the actual cost into the production cost. If your workspace requires approval for production cost changes, the change is sent for approval first and applies when a reviewer approves it. Adopt actual is unavailable until the first receipt gives the material an actual cost.
Finance → Cost variance lists materials and products whose production cost and actual cost have drifted apart, so you know what to re-set. See Compare planned and actual cost.
Choose the cost method
Section titled “Choose the cost method”By default Keelvy uses the weighted average. To use first in, first out, an administrator changes How inventory cost is calculated in Settings → General. A change applies from that day forward and never rewrites what was already issued or reported. It can be changed once a day.
The choice is separate from Which batch goes first (soonest to expire or oldest received), which decides which units physically leave the shelf.