Impact of Changing Cost Methods

Within the product window of a product in Acctivate, users can set up an initial Cost Method. The ones available from the drop down list are:

  • Average
  • LIFO
  • FIFO
  • Standard

(For more information about Cost Methods in general, click here)

Once the cost method is set, it can be changed easily from one to another as long as there are no transactions with this product involved. After a transaction has been made with this product, the cost method can no longer be changed. The primary reason for this is to preserve data integrity.

But what happens if you do want to change the Cost Method of a product with transaction history? In this case, you can take the following steps:

  • Make a copy of the product using the Copy button

  • Change the cost method of the copy to be the desired method

  • On the original, alter the name so that it is clear this product record contains the information for the old cost method. For example, “Button” could become “Button_OLD”

 

  • Mark the old product record as inactive

  • Transition to using the new version of the product in transactions moving forward

 

You’ll need to be aware that the transaction history of the old product will not carry over into the new one. The history will still be in Acctivate, just within the old product.

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Posted in Accounting - Last modified on March 10, 2017Connor
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