Zeyto Academy · Core · Module 4
Inventory and costing
Items, units, warehouses, opening stock, costing methods, adjustments, stocktakes and how stock ties to the ledger, taught on Zeyto.
You will be able to
- Create items with correct type, units, barcodes and VAT code
- Set up warehouses and post opening stock
- Calculate moving-average, FIFO and LIFO cost on the same sale
- Post transfers, adjustments and stock counts and name the entries
- Read the stock reports and trace a quantity to its documents
- Reconcile the Inventory account with the stock valuation
Items: the products you buy, sell and count
- Only Stock items move quantity and cost.
- Group, Brand and Category organise reports; categories also drive POS tabs.
- The VAT Code on the item is the starting code for new lines.
- Items are made inactive, never deleted.
Units of measure and pack sizes
- Every item has one base unit; larger packs are converted by Factor to Base.
- Contains multiplies through smaller packs for you.
- Pick the base unit before the first transaction.
- Reports count in base units.
Warehouses, racks and opening stock
- A warehouse holds stock; only Transit type changes behaviour.
- Opening stock is one OST document per warehouse, posted at cost.
- It debits Inventory and credits the opening balance account.
- Correct a posted opening stock with Edit and Save Changes.
Costing: how stock is valued
- Moving average = total value / total quantity after each purchase.
- A sale removes stock at the average; it does not change the average.
- FIFO and LIFO take layers in a different order and give different COGS.
- Negative Stock set to Block stops stock-outs below zero.
Moving and adjusting stock
- Transfers move quantity and cost with no accounting entry.
- Via Transit holds goods until you press Receive.
- Adjustments hit the accounts: Inventory against an offset expense account.
- Increase and Decrease use the current average cost.
Stock counts, batches and serial numbers
- Count, enter, and post only the differences; empty means not counted.
- Differences are valued at the average cost and post against the stock adjustment account.
- Batch, expiry and serial tracking make those details mandatory on stock documents.
- Serial units move through In Stock, Sold and other statuses.
Stock reports and item history
- Pick the report for the question: now, past date, history, buying list, exceptions.
- Read the Value total rather than the On Hand total.
- Cancelled documents leave REVERSAL rows, not gaps.
- Movement type and document type narrow the ledger report.
How stock ties to the general ledger
- Every valued stock event posts Inventory and an offsetting account.
- Transfers move stock with no ledger entry.
- The Inventory balance and Stock Balance and Valuation total should agree.
- Differences have causes: dates, branch filters, manual journals, negative stock.
Costing: how stock is valued: key table
| Method | Cost of the 120 units | How |
|---|---|---|
| Moving average | AED 1,320 | 120 x 11.00 |
| FIFO | AED 1,260 | 100 x 10 + 20 x 13 |
| LIFO | AED 1,350 | 50 x 13 + 70 x 10 |
Moving and adjusting stock: key table
| Direction | Effect | Entry |
|---|---|---|
| Increase | Stock up at the item's current average cost | Debit Inventory, credit the offset account |
| Decrease | Stock down at the current cost | Debit the offset account, credit Inventory |
| Revalue up | Value up, quantity unchanged | Debit Inventory, credit the offset account |
| Revalue down | Value down, quantity unchanged | Debit the offset account, credit Inventory |
Stock reports and item history: key table
| Question | Report |
|---|---|
| What do I hold now and what is it worth? | Stock Balance and Valuation |
| What was the stock on a past date, and what moved in a period? | Stock Balance, Period Movement |
| Why did this quantity change? | Stock Ledger / Movement |
| What should I buy? | Reorder Report |
| Which items are below minimum, over maximum or negative? | Stock Status |
| What expires soon? | Batch Expiry |
| What sells fast or slowly? | Slow / Fast Movers |
How stock ties to the general ledger: key table
| Event | Stock | Ledger |
|---|---|---|
| Opening stock | In at cost | Debit Inventory, credit opening balance account (3900) |
| Goods receipt (GRN) | In at line Rate | Debit Inventory, credit Goods Received Not Invoiced |
| Purchase invoice with no GRN | In at line value | Debit Inventory, debit VAT Input, credit Payables |
| Sale of a stock item | Out at average cost | Debit Cost of Goods Sold, credit Inventory (plus the sales and VAT entries) |
| Purchase return | Out at stock cost | Credit Inventory, credit VAT Input, debit Payables |
| Adjustment or count | In or out at average cost | Inventory against the offset account (5100 by default) |
| Transfer between warehouses | Moves, same value | No entry |