Purchase Orders (POs) & Cost Distribution
When you run low on stock, create a PO to officially request supplies from your Vendors. The platform introduces intelligent cost-averaging.
How Sourcing Costs Are Distributed
When you add items to a Purchase Order, you specify the wholesale cost per item. However, importing goods frequently incurs extra Shipment Costs and Taxes/Duty.
To ensure your profit margins are completely accurate, Bizlync proportionally divides these extra Shipping and Tax costs over the individual products in your order.
Cost Distribution Example
If you buy $1,000 worth of Laptops and $500 worth of Mice, and pay $150 in shipping, the system proportionally burdens the laptops with a higher percentage of the shipping fee when calculating the true average "Sourcing Cost" of the items into your inventory.
Inventory Valuation (Cost Averaging)
When a Purchase Order is received and processed, the new items are added to your existing inventory. If you already had some of those products in stock that were bought at a different price previously, Bizlync automatically calculates a new Weighted Average Cost.
Weighted Average Example
You have 10 keyboards in stock that cost you $20 each. You receive a new PO for 10 more keyboards, but the supplier price went up (including proportional shipping/tax), costing $30 each. Your new inventory will be 20 keyboards, and the system automatically updates the internal "Average Cost" of the keyboard to $25. Future profit margins on sales will be calculated against this new weighted average.
How to Manage a Purchase Order
- Navigate to Purchase Orders and click Create PO
- Select the Vendor
- Add the Products and the wholesale quantities/cost
- Input the exact Shipment Cost and Taxes in their respective fields
- When the delivery physically arrives, click Process PO:
- Intelligently updates the Product's true Average Cost
- Adds the new quantity to your Inventory
- Generates unique Serial IDs for every single unit received