We've already seen that Datalab Pantheon supports several methods for valuating stock (see Stock Valuation). Of course, this pertains to the price free of sales margins and included VAT. In retail, you can also post the value of stock by retail price.

The retail price is the purchase price calculated using the chosen valuation method plus the sales margin and VAT included in the sale price. The sale price is always the price from the first price class when using this valuation method. The margin is therefore calculated as the difference between the sale price from the first price class and the purchase price calculated using the chosen valuation method.

In the example below, we'll be valuing stock by average price, but could also have used valuation by fixed price. The LIFO and FIFO methods are not recommended, because determining the included VAT and margins would be confusing when the price changes.

1. Warehouse - select a warehouse where you'll post stock by retail price
2. Receiving - Now you're ready to create documents for receiving goods. The value of stock by sale price will be posted to the inventory account when automatically posting accounts payable, and the difference between the purchase and sale price (minus VAT) is posted to the  Included Gr. Margin account from the Document Types settings. The VAT included in the sale price is posted in the Included VAT account, which is also found in the account settings in the Document Types settings. A sale price for the first price class must be entered in the  Pricing section of the Items register before you can start receiving goods.
3. Issue - issue the goods.
4. Interwarehouse Transfer - goods can also be transferred between warehouses.
5. Price Change -  this document, which you will also post, changes the price level of the entire stock to the new price level.
6. Warehouse Card
7. Commercial Records
8. Refreshing Stock
9. Automatically Posting Material Consumption

The Importance of Correct Retail Prices

The sequence in which information is entered is very important for posts of this kind. Sale prices must be current AT THE MOMENT the issuing invoice is created. Later changes to the retail prices in the Pricing section of the Items register DO NOT EFFECT lines in issuing invoices that have already been created.

Follow these steps to post by retail price:

1. Before issuing goods, the pricing in the Pricing section of the Items register must be filled in (sale prices must be defined). There are several ways to do this.

• manually, by entering information directly in the pricing panel;
• when receiving goods, you can do the pricing directly in the receiving document (see Pricing). To use this method, the Fill Item Sale Price checkbox in the Document Types setting for receiving documents MUST NOT be selected. In the Pricing panel of the Items register, the Sale Price is Fixed must be selected in the Price Calculation box, which is typical of items that have their stock posted by retail price. Every change of retail price MUST be recorded with a price change document, which must be used to adjust retail prices to the new price level and is also posted. The transfer of information from the pricing of the default document to the price change document and then to the pricing in the Items register will activate the wizard in the receiving document (see Creating Price Change Documents ).
• Directly, using a  price change document.

2. A price change document must be created whenever the retail price of an item that is in stock has been changed. This will generally change the value of stock, and also the calculated price difference and VAT.

Price change documents must be consistently created and confirmed, that is, before the next issue and after the next receipt, in order to use the new price level.

You can manually change information in the Pricing panel of the Items register only if the item is currently not in stock at the warehouse (for example, preparing for the first receipt of the item into stock, setting up a new database, etc.)

3. A price change document can also be created automatically within a receiving document (or transfer document) based on information in the receiving document (see Pricing). To perform this task, the the Fill Item Sale Price checkbox in the Document Types setting for receiving documents MUST NOT be selected. In the Pricing panel of the Items register, the Sale Price is Fixed must be selected in the Price Calculation box, which is typical of items that have their stock posted by retail price. Every change of retail price MUST be recorded with a price change document, which msut be used to adjust retail prices to the new price level and is also posted.

For this purpose:

• enter the new information in the Pricing tab of the receiving document;  
• automatically create a price change document using the wizard in the receiving document (see Creating Price Change Documents );
• a price change document created this way must be confirmed in order to transfer the information to the Pricing panel in the Items register. 

4. When you create an issuing invoice, the following will be entered in the document line:

•  the retail price entered in the Pricing panel of the Items register AT THE MOMENT the issuing invoice is created. (This way, the user can use the sale price valid at the time of sale for each individual sale when posting by retail price, and can change the pricing using a price change document). Therefore, if information in the Pricing panel of the Items register is changed after you've entered lines in an issue document, this change WILL NOT affect the lines.

The Commercial Records report also uses this information for the formally most correct method for reporting commercial records - Price from document line, which uses the sale price plus tax (see the example in Price from Document Line).

• the actual sale price with which the goods were sold. This is usually the same as the price from the pricing panel of the Items register. (If contract prices are used for a particular customer, if you've approved a rebate, or in similar situations, the difference between the prices will be shown in the commercial records reports shown above, in the Purchase section of the issued invoice).

General Functions:

• Stock

Related Topics:

• Valuating Goods by Average Price
• Valuating Goods Using the LIFO Method
• Valuating Goods Using the FIFO Method
• Valuating Goods by Fixed Price
• Upward/Downward Variations of the Value of Stock