New Weighted Average Cost Features in Turbo Inventory

By David Joyce

Inventory costing has always been one of the biggest challenges for growing businesses — especially for companies dealing with fluctuating supplier pricing, manufacturing costs, batch tracking, or high stock volumes.

That’s why we’re excited to introduce Weighted Average Costing (WAC) in Turbo Inventory.

This new feature gives businesses a far more accurate view of:

• Product margins
• Inventory valuation
• Manufacturing costs
• Profitability
• Cost of sales

Whether you’re buying products, manufacturing goods, or managing batch-tracked inventory, Weighted Average Costing helps ensure your figures reflect real-world costs.

What Is Weighted Average Cost?

Weighted Average Cost is an inventory valuation method that calculates the average cost of all units currently in stock.

The formula is straightforward:$$\text{Weighted Average Cost} = \frac{\text{Total Cost of Goods Available}} {\text{Total Units Available}}$$Weighted Average Cost=Total Units AvailableTotal Cost of Goods Available​

Instead of relying on:

• Last purchase price
• Static costing
• Manual adjustments

Turbo continuously recalculates the average cost as stock moves through the system.

This is especially useful when:

• Supplier prices regularly change
• Products are blended or identical
• Manufacturing input costs fluctuate
• It’s difficult to identify exact unit costs

Why Businesses Need Weighted Average Costing

Many businesses unknowingly rely on outdated costing methods that distort their margins.

For example:

You buy:

• 10 units at €2
• Then 10 more at €8

If you only use “Last Cost,” your profitability can suddenly swing dramatically depending on the latest purchase.

Weighted Average Cost smooths this out and gives you a realistic ongoing average.

That means:
✅ Better pricing decisions
✅ More accurate margins
✅ Improved profitability reporting
✅ Better stock valuation

How Weighted Average Cost Works in Turbo Inventory

Turbo now allows you to actively set products to use Weighted Average Costing.

Simply:

1. Open the product
2. Select the costing method
3. Choose Weighted Average Cost

Once enabled, Turbo automatically handles the calculations for you.

No spreadsheets.
No manual recalculations.
No accounting headaches.

Product-Level & Batch-Level Cost Tracking

One of the most powerful parts of the update is that Turbo tracks Weighted Average Cost at both:

Product Level

Perfect for:

• Standard stock items
• Consumables
• Purchased inventory

Example:

• Filters
• Food products
• Retail goods

Batch Level

Ideal for:

• Manufacturing
• Batch-controlled inventory
• Raw material fluctuations

Example:
If timber costs more this month than last month, Turbo tracks that difference directly into the manufactured batch cost.

This gives manufacturers significantly more accurate production costing.

More Accurate Margins on Sales

When products are sold using:

• Sales Orders
• Invoices
• Quotes

Turbo uses the current Weighted Average Cost automatically.

Even better:
If multiple batches are sold together, each batch can carry a different cost.

This gives you:

• True margin visibility
• Better profitability analysis
• More realistic reporting

Goods Receipts & Supplier Invoice Accuracy

Turbo separates:

• Goods receiving
• Final supplier costing

This means:

• Stock can be booked in immediately
• Costs can be finalized later from the supplier invoice

Once the supplier invoice arrives:
✅ Weighted Average Cost recalculates automatically
✅ Inventory valuation updates
✅ Financial postings adjust correctly

This is a huge operational advantage because warehouse staff do not need access to sensitive cost pricing.

Improved Inventory Valuation Reporting

Another major enhancement is improved inventory valuation visibility.

Turbo now breaks inventory valuation down by:

• Lot
• Batch
• Serial-tracked material
• Heat-tracked material

This gives businesses:

• Full traceability
• Better audit visibility
• More accurate inventory reporting

Better Financial Reporting

When inventory transactions transfer to your accounts package, Turbo now sends the accurate Weighted Average Cost at that exact moment in time.

The result?

✅ More accurate Cost of Sales
✅ More realistic Gross Profit
✅ Cleaner financial reporting
✅ Better business insights

Designed for Real Businesses

Weighted Average Costing is particularly valuable for businesses operating in:

• Manufacturing
• Distribution
• Wholesale
• Food production
• Automotive
• Engineering
• Service operations with stocked materials

If your supplier pricing changes regularly, this feature can dramatically improve the accuracy of your reporting.

Final Thoughts

Turbo Inventory has always calculated weighted averages behind the scenes.

Now, businesses can fully leverage those calculations directly within their operational and financial workflows.

This update is a major step forward in:

• Inventory accuracy
• Manufacturing costing
• Margin visibility
• Profit analysis

And most importantly:
It helps businesses make better decisions using real-world costing data.

If you’d like to learn more about Weighted Average Costing in Turbo Inventory or see a live demonstration, get in touch with the team today.