Perpetual Inventory Method Overview

WorkGuru's optional stock module is based on the First-In, First-Out (FIFO) costing and perpetual inventory methods of inventory management.  FIFO perpetual inventory method provides WorkGuru the most accurate stock control method available, where inventory records are updated in real-time with every usage, purchase, or inventory movement. Unlike the periodic inventory system—which only updates inventory balances at specific intervals (e.g. monthly or quarterly)—the perpetual method continuously maintains an up-to-date view of inventory levels and stock value.

The FIFO (First-In, First-Out) costing method impacts how inventory cost of goods sold (COGS) and inventory valuation are calculated in real-time. FIFO assumes that the landed cost of the oldest inventory (first-in) is used or dispatched first, and the newest inventory remains in stock. 

The system continuously tracks:

• Each purchase or adjustment transaction into stock (date, quantity, landed cost)
• Each material usage or dispatch and calculates the COGS from the earliest (oldest) transaction available

It is important to note that the COGS is calculated when the stock is used on projects/production jobs or dispatched on stock sales, NOT when they are invoiced.

Advantages for Perpetual Stock Control

Real-Time Inventory Accuracy

• Continuously updates inventory after each transaction (sale, purchase, return)
• Instant updates ensure that stock levels are accurate at all times.
• Easier management of  multiple locations or warehouses

Real-Time Cost Accuracy

• Value of stock recognised when purchased per transaction (no averaged costs)
• Supports currency conversion and landed costs.
• Cost of stock (COGS) recognised when taken out of stock.
• Value of COGS and ending inventory is always current

Efficient Purchasing and Optimised Stock Levels

• With up-to-date inventory levels, WorkGuru can automate reorder points (Buying Guru) or forecasting (Stock Shortages Report) and avoid running out of stock or carrying excess.
• Reduces the chances of stockouts or overstocking.
• Enables timely decision-making for reordering or halting purchases.

Improved Operational Efficiency

• Automated updates reduce manual data entry and minimize human errors.
• Facilitates faster stocktaking and reconciliation.
• Enhances productivity for warehouse and inventory staff.

Better Customer Service

• Ensures availability of items as stock levels are closely monitored.
• Helps provide accurate delivery estimates and inventory visibility for projects and stock sales.

Loss and Shrinkage Detection

• Frequent and real-time updates make it easier to identify discrepancies.
• Helps in detecting theft, loss, or misplacement of goods quickly.

Supports Real-Time Reporting and Analytics

• Provides WorkGuru with real-time inventory data for dynamic stock reporting and performance tracking
• Real-time data feeds into integreated business intelligence tools via the WorkGuru API such as Microsoft PowerBI or Dashboard Insights for inventory turnover, sales trends, forecasting, and more.