Making a stock movement report tie

A stock movement report shows, per product, what you opened with, what you bought, what you sold and what you closed on — each as a quantity and a value. It is one of the most useful reports a business can run and one of the easiest to build so that it does not add up.

Rule one: value opening at the cost in force then

Not at today’s average. Restating an opening balance at a cost that was not known at the time launders the period’s purchases into its opening stock, and the report then shows a period that looks less profitable than it was, for no reason a reader can see.

This requires the movement ledger to carry the balance and the cost as at each row, which is a good reason for it to do so.

Rule two: value purchases at what was invoiced

Not at the weighted average. The average is what stock is carried at; the receipt cost is what you actually paid. A purchases figure that moves when some unrelated receipt shifts the average cannot be reconciled against a supplier statement, which is the main thing anyone wants to do with it.

Rule three: have a residual adjustments column

Opening plus purchases less sold does not equal closing, and it is not supposed to. Products created inside the window have opening entries; there are manual adjustments and count variances; and a refund of an order rung up before the window restores stock while contributing nothing to units sold.

Compute the adjustments column as the residual and the quantities tie by construction. Without it, four columns sit next to each other not adding up with no explanation offered — which is how a reader learns to distrust the whole table, including the parts that were right.

The one column that is not at cost

Sold value is usually wanted at selling price, because that is what an owner reads as turnover. That means the value columns deliberately do not tie across the row, and it is worth saying so on the report. A footnote costs nothing; a reader silently concluding the report is broken costs a great deal.