An Average Landed Cost (ALC) is the average value calculated for your products on a per unit level. This value is calculated to determine the current value of your product, based on any costs incurred to procure it and add it to your inventory. More specifically, the ALC is the value used to calculate the total stock value per product, given your current stock on hand quantity.

The ALC is calculated as: Average Landed Cost (ALC) = Total Stock Value / Total Stock Qty

Each time the quantity and/or value of a product's updated in Unleashed, it's ALC is recalculated to provide the most up to date average of your product's value. As such, you will notice that your stock's ALC fluctuates in line with your Purchase prices, Assembly costs and Returns.

To check an individual product's ALC and review how the product's ALC has changed over time, go to the product record and navigate to the Cost tab. The ALC is a non-editable field in the top left of the Cost tab, next to the Last Cost field.

In the grid of the Cost tab, you will be shown a list of the transactions that have been completed in Unleashed and subsequently affected the product's ALC over time. Use the Pre Avg Cost and Post Avg Cost columns to review the fluctuation of your product's ALC over time.

You can review the changes that have been made to your stock's ALC's over time across all your products using the Costing Analysis Report. Navigate to Reports > Purchases > Costing Analysis Report, here you can filter by Product Code or Description for a breakdown per product of how the ALC's been impacted, per completed transaction.

The ALC of a product is predominantly used to calculate:

In the instance where a product currently has no stock on hand and therefore has 0.00 as it's ALC, the product's Last Cost will be used as a temporary cost, until stock on hand is added.

Any transaction that brings stock into your inventory or incurs a charge will have an effect on your Average Landed Cost, and subsequently the total stock value as a whole. The more precise you are with the costs and prices involved in your transactions, the more accurate the product's ALC will be. And as such, the more reliable your reporting is when understanding your product's contribution to your business.

The following transactions can affect the average cost of a product:

When adding new products to your inventory, you can use the Import Stock on Hand template to add a starting quantity and stock value in bulk. This is especially useful when you're starting your Unleashed journey and implementing it as an inventory solution to your business, as it allows you to upload an immediate starting ALC and quantity per warehouse for your stock, without requiring individual transactions such as Purchases or Stock Adjustments.

The Import Stock on Hand feature is only available to use for products that are new to your inventory, have not been added to any transaction and have never held any stock on hand in your Unleashed account.

In a Purchase Order, you will advise the product's purchase price and any additional costs (Cost Lines) incurred during the procurement of the stock. At the point of receipt (and Complete if costs are added after receipting), the total price and cost of the receipted quantity is used to calculate a Landed Cost, which is subsequently used to recalculate the product's ALC within the total stock on hand.

By default, the additional costs which will used to calculate your product's Landed Cost are added as Cost Lines to the Purchase Order, and proportionally distributed across the order lines based on the distribution method selected in Settings > Company. However, you can change the distribution method used per Purchase Order by selecting from the dropdown menu in the Purchase Order's Cost Line.

In some cases, you will need to adjust the quantity and/or value of your Stock on Hand to replicate any changes that have impacted your physical stock. This could be anything from managing stock loss and damages which subsequently effect how much stock you have available to expiring stock which has reduced in value. To account for these changes and keep your Stock on Hand and ALC accurate you will need to perform a Stock Adjustment.

By default, when advising a quantity in the Stock Adjustment for a product a proportional value will be automatically generated too, based on the product's current ALC. This helps to ensure your product's ALC remains consistent when adjusting your stock on hand but you have the opportunity to edit the value as necessary. It's therefore worth noting that if you are to amend the generated value it will have an affect on the product's ALC, which will be shown in the Warehouse and Global Values headers of the Stock Adjustment.

The Stock Count feature allows you to review your current Stock on Hand in comparison to what is physically available, and subsequently account for any variances to re-align your inventory. When a product's Count Quantity differs from the Stock on Hand quantity for a counted warehouse, an Stock Take Adjustment is made for the product when the Stock Count is completed. This adjustment will proportionally adjust the value of the product, in line with the quantity and therefore triggers a recalculation of it's ALC.

In the instance when a product's Stock on Hand quantity is zero (thus has a 0.00 ALC) and the Stock Count adds Stock on Hand for it, the product's Last Cost is used to calculate a value for the stock being adjusted in. It's therefore suggested to check the product's ALC after the Stock Count is completed and use either a value only Stock Adjustment or a Stock Revaluation to make any corrections to the product's new ALC.

A Stock Revaluation is an import that can be completed, which will replace a product's ALC with a new value upon impot. It's a useful tool for updating your stock's ALC in bulk.

The Stock Revaluation's import template will only include products that currently have stock on hand in Unleashed. If a product has zero stock on hand, it will automatically have an ALC of 0.00 and will not be included when the Stock Revaluation template file is downloaded.

To calculate the "Total Assembly Cost" for an Assembly and therefore the value of the assembled stock, Unleashed sums the ALC of all component quantities and additional costs (either Never Diminishing Products or Supplier Costs). When the Assembly is completed the assembled product's Stock on Hand increases and the Total Assembly Cost is added to the product's stock value, which triggers a recalculation of the assembled product's current ALC. Any adjustment made to an open Assembly will affect the "Total Assembly Cost" and subsequently the assembled product's ALC when the Assembly is completed. It's therefore very important to ensure any changes or edits made to an Assembly are accurate.

The Unit Cost field within an Assembly advises the unit value (ALC or Last Cost if the component has no Stock on Hand) of the component product and this Unit Cost is applied to the component's quantity to calculate component's Total Cost for the assembly.

Supplier Costs can be added to an Assembly to account for any additional costs, such as labour or transport, that are incurred from a third party during the manufacture of the assembled goods. These costs increase the value of your assembled stock and will therefore have an effect on your assembled stock's ALC.

Similarly, internal expenses or costs incurred during the assembly process that need to be included but aren't due to be billed from a Supplier can be added as a component to an Assembly using Never Diminishing Products (NDP). The Cost in an NDP's Sale tab is the value that will populate in the Unit Cost field of an Assembly an will therefore add further value to the assembled stock.

During a Disassembly, the assembled product's current ALC is used to calculate the Disassemble Cost that's distributed to the component products. As an assembled product's ALC can fluctuate over time the value given to a component product from a Disassembly is not guaranteed to match the Total Cost used during an initial Assembly. It is therefore worth bearing in mind that a component's ALC is expected to fluctuate if it is used within an Assembly and subsequently disassembled.

When completing a Supplier Return either the stock on hand, stock value or both is being adjusted to account for it. As such, the products involved in the Supplier Return will have their ALC's recalculated to align with the remaining stock on hand and value attributed to the product.

When stock has been returned from a customer, you will need to add it back into your inventory for resale as appropriate. To keep consistency of your stock's value a Credit Note will return goods to stock at the current ALC, regardless of the product's value at the time it was originally dispatched.