Introduction to Adjustments
Once you have the idea of products and materials, the next step is to understand how the stock is managed and calculated in Craftybase - this is done via a concept called Adjustments.
We'll cover
This tutorial should take approximately 17 minutes to complete.
What are Adjustments?
Craftybase is perpetual inventory software. Perpetual means that we calculate your stock on hand and inventory value constantly and in real-time (this is unlike spreadsheets or accounting programs that calculate only periodically when you manually stocktake).
All stock changes in perpetual inventory systems are recorded as adjustments. An increase in stock is a positive adjustment, and a decrease is a negative adjustment.
You won't need to add these directly most of the time - adjustments will be automatically added based on your actions.
For materials, adjustments will be created when an expense is created or a manufacture that uses the material is entered. Inventory adjustments will be created for products when the product is manufactured, or an order is added.
Manual adjustments can be added directly when necessary when stock is removed from the system without being directly related to a manufacture or an order. The most common scenario for adding adjustments is when a product or material is damaged or unsellable (otherwise known as wastage or inventory loss).
Rolling / Moving Averages
Craftybase uses a calculation method called Weighted Average Cost for all costings. This inventory costing strategy is also known as the moving average or rolling average method. This is an accepted GAAP and IRS method of accounting for inventory and is the one most commonly used in manufacturing situations, as it effectively allows for the "pooling" of materials. The Weighted Average Cost method involves recalculating all unit costs for materials and project material costs each time any change is made to inventory levels based on the amount available in stock at each point in time.
Your costing and stock calculations are thus based exclusively on your adjustment history - this is why it is really important to ensure that this is correct and represents every change since you began tracking in Craftybase.
How to find the adjustment history
To find your Adjustment history, navigate to your Material, Product, or Variation page and click the Adjustments tab.
One of Craftybase's most useful areas is its Adjustment history: for each material and product, you can see every stock change made and when. This is handy when trying to solve any stock discrepancies between your physical and Craftybase stock levels, as you can see out-of-stock situations and costing problems on one page.
The clipboard icon represents the stock status on the date the adjustment was made. Green means that there was enough stock on hand to cover the manufacture or order, whereas a red clipboard indicates that there was not enough stock on hand. You'll want to review your stock adjustments on a regular basis for each material and product to ensure that you have no red clipboards and that your unit costings are all in place correctly. If you spot an issue, you'll want to review all stock changes before the problem and see if you can find the reason for it. Most problems are due to missing adjustments (i.e., a manufacture was not added on a day you made products, so orders after this time are not able to be fulfilled). You may find, however, that some costing issues are due to incorrectly entered costs for expenses.
More troubleshooting guides for adjustment issues can be found here:
Have some questions?
If you have any additional questions, please get in touch, and we'll be happy to help.