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Expected Cost Price vs. Cost Price

In Rackbeat, a distinction is made between the expected cost price and the cost price. Here's an overview of the difference

Expected Cost Price

The expected cost price is the price Rackbeat will default to when an item is to be ordered from a supplier.

In practice, this means that Rackbeat will, by default, use this price for the product when a purchase order is created. This does not mean that the product must be purchased at this price—of course, it can always be adjusted, as prices may vary from order to order. The expected purchase price does not determine the actual unit value of the item in inventory—it is simply a helpful reference in the purchasing process.

You enter the expected cost price yourself under the product information.

Cost Price

The cost price reflects the actual inventory value of a given product in stock – therefore, a product does not have a cost price if there is no stock available.

Since a product can be purchased at different prices over time, the unit value of a product may change continuously. As such, the cost price of a product directly affects the total value of the inventory.

The method by which this value is calculated depends on the chosen inventory valuation principle.

In Rackbeat, you can work with either Average Cost Price or FIFO (First In, First Out).

  • If the Average Cost Price method is used, the inventory value is calculated based on the average purchase price of the product.

  • If FIFO is used, the total inventory value is calculated differently – here, the value of the inventory is determined by the principle that the first products purchased are also the first ones sold.

How to Adjust Cost Price

The cost price is automatically calculated by the system based on inventory movements.
Therefore, you cannot change the cost price directly on the product.

If you want to override the cost price, the following conditions must be met:

  • There must be stock available

  • The quantity cannot be 0, otherwise the cost price cannot be changed

Adjust the Cost Price via an Adjustment

  1. Go to Products → Adjustments

  2. Create an adjustment where you modify the cost price of the product

Changes to the cost price will affect the total inventory value of the product.

See a more detailed guide on adjusting cost price/quantity here:
How to make an adjustment (quantity/cost price)