Cost to Make
Inventory Valuation

Inventory valuation is a critical component in calculating Cost of Goods Sold (COGS), which ultimately determines your organization’s profitability. For many industries with complex processes, finance teams must expand beyond ERP tools and establish a flexible inventory valuation approach that can offer both historical and forward-looking answers to evaluate profit performance and predict outcomes.

Inventory Valuation - 3C Software

With the ImpactECS platform, you can maintain multiple inventory valuation methods and calculate answers for individual production stages, estimated product demand levels, external process requirements, SKU proliferation, or product obsolescence. By connecting production, inventory management, and general ledger volume data, you can accurately and dynamically calculate inventory values and eliminate unreliable spreadsheet analysis. With more transparent and traceable processes, you can make better informed purchasing decisions, improve customer or vendor negotiations, or even change customer behaviors.

Create a meaningful inventory valuation process with ImpactECS

  • Use any cost-flow method: Calculate inventory values using any method – Last-in First-out (LIFO), First-in First-out (FIFO), Weighted Average, Lower of Cost or Market (LCM) – at standard or actual cost values
  • Value inventory at any stage: Compute values for each process, including raw material inventory, production and WIP steps, intercompany movements, or third-party subcontractors
  • Support multiple inventory accounts simultaneously: Model the effect of inventory changes for outside processing, consignment inventory, reserves, or any other account type to improve planning and forecasting activities
  • Gain confidence through traceability: Maintain granular views of direct and indirect costs associated with raw material and commodity items, manufacturing processes, transfer costs, packaging costs, and more
  • Manage inventory values proactively: Simulate trial balances for each inventory account throughout the period to increase the efficiency and accuracy of the closing process

The Role of Cost Systems in the Age of Digital Transformation

To tackle the challenge of getting more accurate, detailed and actionable cost information, finance and technology teams must work together. But what exactly does that mean in this age of digital transformation? And why is advancing your cost system processes and capabilities such a critical step?

Join our live conversation with corporate manufacturing accounting team from Shaw Industries and learn why they started their journey to a better product cost system over a decade ago, and how they’ve evolved into a fully-integrated costing analytics program that supports a wide range of corporate initiatives.

Resources

It Starts with Costs

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Get Quick Insights and Best Practices

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Is Your Product Costing Process Healthy?

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Creating a Cost-Focused Culture

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Guide to Implementing Cost Systems

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Cost Allocations: Gaining Actionable Insights

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