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Weighted Average Cost
Learn why item cost is important, how to add initial cost, how cost updates when receiving items, how to fix incorrect costs, and how to disable weighted average.
Table of Contents
Understanding Item Cost in ShopKeep
Review the basics of item cost and how it impacts your business. Learn why tracking item cost is important, what affects cost in ShopKeep, and how average cost is computed.
An item’s initial cost can only be entered when you first add the item to inventory. See a brief overview of adding items below or see our complete Add Basic Items article for more information.
- In BackOffice, click 'Items' and select 'Items List'.
- Click 'Add New'.
- Select 'Create' under 'Basic Item' or 'Item with Variants'.
- Fill in the item details, including its 'Cost'.
The item’s cost cannot be edited from this page after saving the item.
- Click 'OK' to save.
By default, cost updates to a weighted average during the receiving process for accurate inventory valuation. See a brief review below or learn more about the Receive Inventory feature from our complete article.
- In BackOffice, click 'Items' and select 'Receive Inventory'.
- Search for an item to receive.
- Enter the number of ‘Units received’ and the ‘Total line cost’.If the item has a negative quantity, adjust it to the actual quantity on hand before receiving the item.
New cost updates to a weighted average of the old cost and the receiving cost.
- Click ‘Save’ to finish receiving the item.
- In the ShopKeep app, tap 'Get Updates' to sync the item's new cost with the register.
Fixing Incorrect Costs
If you enter the wrong cost or quantity while receiving inventory, use Bulk Management to make corrections. See a brief review below or learn more about this feature from our complete Bulk Management article.
Bulk Management changes will override the average cost calculations for inventory items.
- Select 'Modify Inventory' and click 'Next'.
- Click 'Export your existing inventory to a CSV' and open the export in spreadsheet software.
- In the spreadsheet, delete all item rows that do NOT need to be edited.
- Update the cost or quantity column for remaining items on the spreadsheet.
- Save the spreadsheet.
- In Bulk Management, click 'Choose File', select the modified spreadsheet, and click 'Next'.
- Map ‘Cost’ and/or ‘Quantity’ to their ‘CSV Headers’. Change all fields other than ‘Item UUID’ to ‘unassigned’.
- Click 'Next' and 'Confirm & Proceed'.
- Refresh the page to see the status of the import.
- (optional) Check the Items List to verify the items’ updated cost and quantity.
- In the ShopKeep app, tap 'Get Updates' to sync the items' new cost with the register.
Disabling Weighted Average Cost
If you prefer to use the last cost of received items to value your inventory items, you can disable weighted average cost. When you receive inventory, cost will update to the per-unit cost of the item being received.
- Click 'Settings' and select 'Inventory Settings'.
- Select 'Last Cost' and click 'Save'.
Now the New cost field updates to use the Total line cost divided by Units received of the received items.