Accounting Tip of the Month: Streamline Inventory Accounting with Moving Average Cost
Inventory costing directly impacts your Cost of Goods Sold (COGS) and profitability. If your numbers swing too much, it becomes harder to understand true margins and make pricing decisions.
QuickBooks Online now offers Moving Average Cost (MAC) to help stabilize and simplify inventory accounting.
Here’s how it helps:
- Improve Cost Accuracy
Moving Average Cost recalculates your unit cost each time new inventory is received. Instead of large swings like FIFO, it smooths pricing changes and gives a more consistent view of COGS. - Automate Inventory Adjustments
Upload physical inventory counts directly into QBO. The system extracts quantities and pre-fills adjustments, saving time and reducing manual errors. - Strengthen Inventory Tracking
Item receipts connect purchase orders to actual goods received, helping ensure your inventory records match what’s physically on hand. - Gain Better Visibility into Margins
With more stable costing and accurate inventory levels, your financial reports reflect reality, so you can make better pricing, purchasing, and operational decisions.
Relying on manual spreadsheets or outdated costing methods can distort your margins and create unnecessary work. Automating inventory accounting keeps your numbers aligned with what’s actually happening in your business.
Need help setting up inventory tracking or evaluating costing methods in QBO? One 8 Solutions is here for that. Schedule a conversation today!
