Revolutionizing Inventory Valuation: From Manual Layers to Streamlined Perpetual and Periodic Accounting

Introduction

The new inventory valuation engine eliminates the old, cumbersome valuation‑layer system and introduces a cleaner, more flexible approach for both perpetual and periodic accounting. The changes address three major pain points identified by accountants: - Excessive manual work - Over‑generation of journal entries and items - Rigid constraints such as the inability to back‑date transfers

Core Changes

• No valuation layers – Valuation is now stored directly on stock moves, removing duplicated data and simplifying the audit trail.
• Simpler data model – Fewer journal items, fewer constraints, and a guided closing process.
• Back‑dating support – Transfers can now be back‑dated, a long‑requested feature.

Perpetual Accounting Workflow

1. Configuration – In Settings → Valuation, select Perpetual and choose a valuation method (e.g., Average Cost). Set the valuation journal and expense account for un‑invoiced receipts.
2. Purchase Order → Receipt – Creating a PO does not affect valuation. When the product is received, a stock move is generated and the valuation (e.g., €10) appears in the Stock column while the Accounting column stays at €0.
3. Bill Upload – Uploading the vendor bill synchronises the stock valuation with accounting instantly.
4. Sales Delivery → Invoice – Delivery creates an outgoing stock move with the same value. After invoicing, the stock and accounting values match, confirming synchronization.

Periodic Accounting Workflow (B‑Periodic)

• Manual or scheduled entries – Valuation is recorded once per period (daily, monthly, etc.).
• Valuation account & variation account – The variation account captures quantities received but not yet posted to accounting.
• Purchase example – Three receipts at €100, €200, €200 result in a total stock valuation of €500. The system aggregates these values for the period.
• Adjustment capability – Individual stock moves can be edited (e.g., change €200 to €280) and the overall valuation updates automatically.

Closing Interface & Inventory Adjustments

• The Closing screen shows the gap between stock valuation and accounting (e.g., €980 vs €0). Users can generate and post the necessary journal entry.
• Physical inventory counts can be entered; the system records the variance in the variation account and prepares the closing entry.
• In perpetual mode, posting can be automated; in periodic mode, it remains manual unless scheduled.

Advanced Topics & Q&A Highlights

• Landed Cost – Still works as before; it updates the valuation on the related stock moves regardless of costing method.
• Consignment – Items on consignment are not valued in your inventory, so the new engine does not affect them.
• Cross‑branch valuation – Not explicitly tested, but the underlying logic should behave like the previous system.
• Cost basis for invoices – With average cost in perpetual mode, the cost is taken from the stock‑move date, not the accounting posting date.
• Post‑entry cost changes – Adjustments after a journal entry are reflected in the next period; past periods remain unchanged unless reopened.
• Price changes on PO vs. Bill – Changing the PO price alone does not affect valuation. The bill price drives the valuation update.

Benefits Recap

• Reduced manual effort – No need to manage valuation layers.
• Cleaner data – Fewer journal entries, easier reporting.
• Greater flexibility – Back‑dating, guided closing, and periodic/manual options.
• Improved accountant support – Simpler interfaces and clearer variance accounts.

How to Get Started

1. Open Settings → Valuation and select the desired accounting mode.
2. Define your valuation journal and expense/variation accounts.
3. Process purchase orders, receipts, and bills as usual; watch the automatic synchronization.
4. Use the Closing interface to finalize period‑end entries.
5. Adjust stock moves directly when errors are discovered.

Conclusion

The revamped inventory valuation system delivers a leaner, more transparent structure with fewer constraints, automatic synchronization, and new back‑dating capabilities. Accountants gain a guided closing tool, and businesses can do more with less effort, confirming that the direction of the new engine is both practical and future‑proof.

The new inventory valuation engine simplifies the data model, removes outdated valuation layers, and adds powerful features like back‑dating and guided closing, enabling accountants and businesses to manage stock values more efficiently and with far fewer constraints.