MPH WMSInventory Valuation
Understand the total value of your inventory using multiple valuation methods
The inventory valuation report shows the monetary value of all stock in your warehouses. MPH WMS calculates four valuation methods simultaneously so you can choose the one that fits your accounting requirements.
Valuation methods
FIFO (First-In, First-Out)
Uses the actual unit cost from each stock batch. Older stock is assumed to be sold first.
- Each goods receipt creates a batch with its own unit cost
- Value = sum of (batch quantity × batch unit cost) across all batches
- If landed cost has been finalized, batch unit costs include allocated freight, customs, etc.
- Most accurate for businesses with fluctuating purchase prices
WAC (Weighted Average Cost)
Calculates a single average cost per item per warehouse.
WAC unit cost = Total stock value ÷ Total quantity on hand
WAC value = Total quantity × WAC unit cost- Recalculated dynamically - reflects all batches currently in stock
- Smooths out price fluctuations between purchases
- Common choice for e-commerce businesses
Standard Cost
Uses the fixed cost price set on the item master record.
Standard value = Quantity on hand × Item cost price- Does not change with purchase price fluctuations
- Useful for budgeting and variance analysis
- You set the cost price manually on each item
LPP (Latest Purchase Price)
Uses the unit cost from the most recent goods receipt.
LPP value = Quantity on hand × Latest receipt unit cost- Reflects current market pricing
- Useful for replacement cost analysis
- Updates automatically when new goods are received
Comparing methods
| Method | Based on | Updates when | Best for |
|---|---|---|---|
| FIFO | Actual batch costs | Goods received | Accurate P&L, tax reporting |
| WAC | Weighted average | Goods received | General purpose, simplicity |
| Standard | Fixed item cost price | Manually updated | Budgeting, variance analysis |
| LPP | Latest receipt cost | Goods received | Replacement cost, market pricing |
Views
By item
Shows each item with all four valuations:
- Quantity on hand - total stock across all warehouses
- FIFO value - based on actual batch costs
- WAC value - based on weighted average
- Standard value - based on item cost price
- LPP value - based on latest purchase price
By warehouse
Groups inventory value by warehouse:
- Total items - number of unique items with stock
- Total units - total quantity of all items
- Total value - per valuation method
- Displayed in the warehouse's configured currency
Historical valuation
View inventory value as of a past date:
- Select an as-of date to see what the inventory was worth at that point
- The system reconstructs stock levels from the movement history
- All four valuation methods are calculated for the historical snapshot
- Useful for period-end inventory statements and audits
Incoming and prepaid
The Summary view shows two figures for goods that are on order but not yet in stock. They measure different things and are reported separately - one is not subtracted from the other.
Incoming Value
The total value of goods on open purchase orders that haven't been received yet.
Incoming Value = sum of (ordered quantity − received quantity) × line unit cost- Includes purchase orders that are Ordered or Partially received
- Represents the value of stock still on the way, not yet counted in your on-hand valuation
Prepaid Inventory
The total of any prepaid amounts booked on open purchase orders - capital you've already paid out for goods not yet received.
- Only counts purchase orders in the Ordered status (once an order is partially received, its prepaid amount is no longer shown here)
- Shown as its own card, grouped by currency
- The card only appears when there is a prepaid amount to display
Incoming Value and Prepaid Inventory are not added together. Prepaid is money already paid toward the incoming goods, so adding the two would double-count it. Incoming Value is the full value of goods on the way; Prepaid Inventory is how much of that has already been paid.
Currency
Both figures are converted to the currency selected at the top of the report using your configured exchange rates, so a prepaid amount recorded in one currency still appears when you view the report in another.
Landed cost impact
If you use landed cost on your purchase orders, the allocated costs (freight, customs, insurance, etc.) are included in the batch unit costs. This means:
- FIFO and WAC automatically reflect the true total cost of goods
- LPP uses the latest receipt cost including any finalized landed cost
- Standard cost is unaffected (it uses your manually set cost price)
Currency
Each warehouse has its own currency. When viewing valuation reports:
- Values are shown in the warehouse's currency
- Multi-warehouse totals require currency conversion (using your configured exchange rates)
Exporting
You can export the valuation report for use in accounting or ERP systems. The export includes all items with their quantities, costs, and total values across all four methods.