Inventory valuation

Rundoo values your inventory two different ways, and they answer two different questions: stock value is what's sitting on your shelf right now, and ledger valuation is every dollar that has ever moved through inventory, added up in order. They usually match, and when they don't it's for a real reason, so it helps to know which number you're looking at.

The short version: stock value is a snapshot, ledger valuation is a history.

The two numbers at a glance

	Inventory stock value	Inventory ledger valuation
What it is	Average cost × (on hand + committed)	The running total of every inventory ledger entry, each at the cost it actually carried
How it's built	Recomputed from today's cost and today's quantity	Accumulated over time, in order
Memory of history	None. It only knows the shelf as it is now	Complete. Every receipt, release, count, and cost correction is in it
What it's for	Operational: buying, margin, what's on the shelf	Accounting: what posts to the General Ledger and ties to your inventory asset account
Where you see it	The Inventory dataset in the Report Builder (stock value), and product on-hand views	Your Inventory asset account balance on the Balance Sheet

Inventory stock value (the snapshot)

Stock value is average cost × (on hand + committed). It's recomputed from scratch every time you look at it, off the current average cost and the current quantity, with no memory of what happened before. Sell everything and it reads $0, because there's nothing on the shelf to value.

This is the number to reach for operationally: what's my shelf worth, how much am I about to spend restocking, what's my margin. You'll find it in the Report Builder Inventory dataset as stock value (alongside on hand value and committed value).

Inventory ledger valuation (the history)

Ledger valuation is every dollar into and out of inventory, accumulated in order, with each entry recorded at the cost it actually carried at the time:

• Receipts add (at the cost you received them for).
• Releases subtract (a sale, a transfer out, a mistint) at the running average at that moment.
• Counts adjust the balance up or down when a count posts a variance.
• Cost corrections true up the value when a cost is fixed after the fact.

Holds and on-order quantities contribute nothing, because nothing has actually entered or left inventory yet.

Because it's the sum of the exact postings that hit the General Ledger, ledger valuation ties to your inventory asset account by construction. It is the number behind the Inventory line(s) on your Balance Sheet. (Rundoo's standard Chart of Accounts carries a per-department inventory asset account, e.g. Inventory - Paint, rather than one combined line.)

Why the two can diverge

Most of the time the two numbers agree. They come apart when history holds a difference that the shelf can no longer show. The classic case is a cost correction that lands on units you've already sold.

Worked example: you receive 50 units for a total of $2,846.09. Over time you sell all 50, released at the running average, for a total of $2,832.82. The shelf is now empty. A later cost correction leaves a $13.27 difference:

• Stock value reads $0. There's nothing on the shelf left to re-price, so the snapshot has nowhere to put the difference.
• Ledger valuation keeps the $13.27. The history recorded what actually happened at each step, and that residual is real, it belongs to the inventory asset account until it's cleared.

This is why an empty shelf can still show a non-zero inventory balance in your books: the shelf forgets, the ledger doesn't.

Which number to use

• Month-end close and QuickBooks: use ledger valuation. It's what posts to the GL and what reconciles to your inventory asset account. Pull it from the Inventory line(s) on the Balance Sheet as of your close date.
• Buying, margin, and day-to-day "what's on the shelf": use stock value, from the Report Builder Inventory dataset.

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Recommended Rundocs

• Cost method, the Average vs Standard cost preference (and what it does and doesn't touch).

• Chart of Accounts, where your inventory asset account(s) live.

• Balance Sheet, where ledger valuation shows up as your inventory asset balance.

• Rundoo Accounting, the map of how Rundoo's books fit together.