Calculating Inventory Value in Meevo

Meevo tracks inventory using FIFO (First In, First Out) and calculates your inventory value at the end of each day by adding together the values that were individually assigned to each product on-hand. The value that gets assigned to a product depends on how the item was added to inventory.

Tip: As a best practice, always make sure your product definitions have an accurate Wholesale value, as Meevo references this value frequently.

How does Meevo calculate inventory value?

Meevo assigns a value to each product when it is added to your on-hand. So, generally speaking, inventory value is calculated by adding together each assigned value. There are some nuances to how these values are calculated, so read on for supporting details about the events that can add or deduct inventory and how value gets calculated for each.

Determining value for items when adding to inventory

The actual Value used in inventory value calculations depends on the value that was assigned to the item when it was added to your inventory. For most events that add inventory, Meevo uses the product definition's wholesale price as of the end of the day the event occurred. The exceptions to this rule are Purchase Orders (prices default to the currently configured Wholesale price, but can be manually adjusted for each item), linked refunds (uses the Wholesale price at the end of the day of the original transaction), and Inventory Transfers (determined based on FIFO at the originating location and cannot be edited).

The following events that add inventory use the product definition's Wholesale price at the end of the day the event occurred:

• Refunds: For linked (historical) refunds, the assigned value is the product definition's wholesale price as of the end of the day that the original sale took place. For unlinked (manual) refunds, the assigned value is the product definition's wholesale price as of the end of the day that the refund took place. Note that to affect inventory value, Return to Shelf must be selected on the refund.
• "Overage" Inventory Counts: An Inventory Count overage can add inventory; in these cases, Meevo uses the product's wholesale price as of the end of the day that the count was committed.
• "Undo" Employee Supply Usage: Undoing (from a previous day) Employee Supply Usage can add inventory; in this case, Meevo uses the product definition's wholesale price as of the end of the day that the product was used.
• Overnight Adjustments: If the Track negative inventory option is disabled, Meevo zeroes out any negative inventory at the end of each day, which can add inventory. In this case, Meevo uses the product definition's wholesale price at the end of the current day to determine its value.

These events follow their own logic for determining inventory value:

• Receiving a Purchase Order: By default, the Unit Price in a PO is actually copied over from the Wholesale value in the product definition. However, you can manually enter a different Unit Price on the PO or Receivals screen, and Meevo will use this field to assign an inventory value of each product being received.
• Receiving an Inventory Transfer or Receiving a Transfer Return: The wholesale value of the product at the "From" location is what determines its inventory value. The Estimated Unit Value is based on the product's wholesale price at the From location. The actual inventory value is calculated overnight. So, the day after a transfer, the Estimated Unit Value field on a completed transfer changes to Transferred Unit Value and provides the accurate Inventory Value as of the end of the previous day.

Determining value for items when deducting from inventory

Inventory can be reduced in several ways: sales, sending an Inventory Transfer, an Inventory Count that is "under" the current on-hand, Employee Supply Usage, or an Inventory Return. Each day, for each product, Meevo divides the total value of the removed items by the quantity of those items to calculate the average daily FIFO (First In, First Out) cost. This cost is then assigned, equally, to each item that was removed that day. This is how Inventory Value is normally calculated when items are deducted from on-hand.

Since this calculation depends on each removed item having an assigned value, there are cases where this value must be temporarily estimated. For a given product, this depends on whether the on-hand was positive or negative at the end of the day.

Product on-hand was positive at end of day
As described above, Meevo calculates the average daily FIFO cost and assigns this value to each item that was removed.

Product on-hand was negative at end of day
If a value cannot be assigned to a removed item, then Meevo provides an estimate. The estimate that Meevo uses depends on whether there was at least one item on-hand (that is, with an assigned value) at the start of the day.

• If yes, then Meevo just uses the value of the items that were on-hand to calculate the average daily FIFO and then temporarily assigns that value to each item.
• If no, the product's Wholesale price (on the Product definition) as of the end of the day is temporarily used as the average daily FIFO.

Each night, Meevo attempts to "finalize" estimates from prior days using the current day's additions. Meevo will update the estimate if enough on-hand was added on the current day to assign an actual value to every item that was removed on previous days. For example, if a few days ago you ended up with an on-hand of ‒3 for Product A, Meevo will be able to calculate the actual value for those three items only when a total of 3 of Product A are added back to on-hand, whenever that may be.

Once Meevo can assign a value to ALL items that were removed on a given day, the actual average daily FIFO value is calculated for that product for that day, and the "pending" flag is removed from that row in the Inventory Adjustment Export.