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Prerequisites
  • Raw materials defined under Stock > Item > Item List
  • Valuation Method set on each item (FIFO or Moving Average)
  • Purchase Receipts recorded with correct Basic Rate
Overview Raw material costing ensures you understand how much you spend on inputs and the value of stock in hand. The CGIC App (built on ERPNext) offers multiple reports and settings to:
  • Capture purchase costs automatically
  • Value inventory using FIFO or Moving Average
  • View real-time stock valuation by item or warehouse
  • Track cost variances over time

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1.0 Set Valuation Method on Each Item

  1. Go to Stock > Item > Item List and open a raw material.
  2. Click the Inventory tab.
  3. Under Valuation Method, choose:
    • FIFO (First In, First Out)
    • Moving Average
  4. Click Save.
FIFO gives precise batch-by-batch costing; Moving Average smooths price fluctuations.

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2.0 Record Purchase Receipts with Cost

  1. Navigate to Buying > Purchase Order, open an order, and click Create > Purchase Receipt.
  2. In each item line, confirm Basic Rate reflects the vendor’s unit cost.
  3. Submit the receipt—CGIC App logs this cost and updates stock value.

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3.0 View Stock Value Report

  1. Go to Stock > Reports > Stock Value.
  2. Filter by Item Group = Raw Materials and Warehouse (optional).
  3. Click Generate New Report.
  4. The report shows for each item:
    • Qty on Hand × Valuation Rate = Stock Value
Use this to see total investment in raw materials by warehouse.

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4.0 Check Item Price List

  1. Go to Selling > Price List (or Buying > Price List).
  2. Select the Price List (e.g., Purchase Price List).
  3. Filter by your raw material to view historical cost entries.

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5.0 Analyze Cost Variance with Stock Ledger

  1. Navigate to Stock > Stock Ledger.
  2. Filter by Item = [Your Raw Material] and Voucher Type = Purchase Receipt.
  3. Review the Rate column to see each receipt’s unit cost.
  4. Compare that to the Balance Qty to detect cost shifts.
Additional Features
  • Revaluation Entries: Use Stock Reconciliation ▶️ Revalue to adjust on-hand valuation if prices change.
  • Batch-Wise Valuation: If batches have different costs, enable Batch Tracking and view batch rates in Stock Ledger.
  • Cost Center Reporting: Tag receipts to cost centers for departmental cost analysis.