The Cost control setting is located under Settings > General Options. To access this section, you need the Settings - Basics permissions enabled in your employee role.
The purpose of the Cost Control setting is to define which cost your Retail account will use when making the following inventory adjustments to items with zero stock or a negative QOH:
- When a sale causes an item to have negative inventory (in-store sale, online sale or sale via API).
- When processing an ad-hoc refund that doesn't reference the original sale.
- When more quantity of an item than you currently have in stock is sent on a transfer.
- When you add quantity while reconciling an inventory count.
- When quantity is added through the API.
The Cost control setting offers the following two options:
- Default cost
- Last recorded cost
To better understand what data these two options will use, go to Inventory > Item Search and open an item. From the Details submenu, the default cost of the item is located under Inventory Defaults and the average cost of the item is located under Stock.
The Default cost option will use the default cost of the item that you've defined. The Last recorded cost option will use the average cost that was used when the item was last sold and removed from inventory. This is true whether your Retail account's Cost method setting is set to Average cost or First in first out cost (FIFO).
Before officially selecting a Cost control option, we recommend discussing the options with your accountant first. In those discussions, however, we do recommend considering the Last recorded cost option if:
- You find it hard to find the time to enter a default cost for all your items.
- The cost of your items when ordering is subject to change on a regular basis.