Average purchase price

Why the purchase price of a product in Ledgivo can be different from the price on your latest bill, and why that gives you the correct profit.

Why is my purchase price different from what I paid last time? +

Prices change: you may buy the same product at Rs 100 this month and Rs 120 next month. Ledgivo does not simply replace the old price with the newest one. It keeps the average price of the stock you actually have, called the weighted average cost.

So after a restock at a new price, the purchase price shown for the product sits between the old price and the new one.

How is the average purchase price calculated? +

Every time you add stock, Ledgivo works out:

New average = (stock in hand × current average + new quantity × new price) ÷ (stock in hand + new quantity)

Example:

  • You have 10 bags of rice that cost Rs 100 each = Rs 1,000
  • You buy 10 more at Rs 120 each = Rs 1,200
  • You now have 20 bags that cost you Rs 2,200 in total
  • Average purchase price = 2,200 ÷ 20 = Rs 110

Quantity matters: buying 30 bags at Rs 120 on top of 10 bags at Rs 100 gives (1,000 + 3,600) ÷ 40 = Rs 115, closer to the new price because most of your stock now came at that price. The result is rounded to 2 decimals.

Why not just use the latest purchase price? +

Because it would show the wrong profit. In the example above, the first 10 bags really cost you Rs 100. If Ledgivo used the latest price (Rs 120) for every bag, selling an old bag at Rs 130 would show a profit of Rs 10 when you actually made Rs 30. Using the oldest price would do the opposite and show too much profit on the new bags.

The average spreads the real cost of everything on your shelf evenly, so your profit reports and your stock value match what you really spent. It is the same method many accountants use for shops with mixed-price stock.

How can I see the actual price I paid to each supplier? +

Ledgivo keeps every purchase with its own price, even though the product shows the average. Open the product, tap Edit, then Purchase history. You will see:

  • Prices by supplier: the last price, the lowest price and the average you paid each supplier, and how much you bought from them. Tap a supplier to see only their purchases.
  • All purchases: every time you added stock, with the date, supplier, quantity and price per unit.

This makes it easy to compare suppliers and see who gives you the best price.

Does changing the price change the profit of sales I already made? +

No. Every sale saves the purchase price on the day of the sale. If prices go up next week, last week’s profit stays exactly as it was. Only sales made after the restock use the new average.

What happens when my stock was zero? +

If you had no stock left (or the stock was below zero), there is nothing to average with, so the new purchase price is used exactly as entered. Example: stock 0, you buy 20 at Rs 120, the purchase price becomes Rs 120.

What if I leave the purchase price empty when adding stock? +

Then the quantity goes up and the current average purchase price stays the same. Ledgivo never replaces a real price with zero.

Does selling or returning items change the average? +

No. Selling reduces the quantity but not the average price of what is left: the remaining bags still cost the same on average. The average only changes when you add stock with a purchase price, or when you edit the purchase price yourself.

Can I set the purchase price myself? +

Yes. Open the product, tap Edit and change the purchase price. The value you enter becomes the new purchase price for future sales. Use this if you want to correct a mistake, for example a wrong price typed during a restock. Past sales are not changed.

How does it work with batches and expiry dates? +

For products where you track batches (for example medicines with expiry dates), each batch keeps its own purchase price. When you sell from a batch, the profit is worked out with that batch’s price, so you do not need an average there.

How does it work with packs and loose units? +

Ledgivo stores the price per single unit. If a pack has 12 units and you buy the pack for Rs 1,200, the unit price is Rs 100 and the average is calculated per unit. The pack price shown on screen is simply the unit average × units in the pack.

Does the average change my selling price? +

No. Your selling price is only changed when you change it. The average purchase price is used to calculate your profit and the value of your stock.

Do product variants share one average? +

No. Each variant (for example size or colour) has its own stock and its own average purchase price.

Average purchase price (Urdu / اردو)

Ledgivo mein purchase price average kyun hoti hai, aasaan alfaaz mein.

Meri purchase price pichli qeemat se alag kyun hai? +

Aap aksar ek hi cheez mukhtalif qeemat par khareedte hain. Ledgivo sirf aakhri qeemat nahi rakhta, balki aap ke paas mojood stock ki average qeemat rakhta hai.

Misaal: 10 bori Rs 100 wali (Rs 1,000) + 10 bori Rs 120 wali (Rs 1,200) = 20 bori, kul Rs 2,200. Average = 2,200 ÷ 20 = Rs 110.

Yeh tareeqa behtar kyun hai? +

Agar sirf nayi qeemat (Rs 120) lagayi jaye to purani Rs 100 wali bori bechne par munafa kam dikhega. Purani qeemat lagayi jaye to zyada dikhega. Average se aap ka asal munafa aur stock ki asal value sahi nazar aati hai.

Har supplier ko di gayi asal qeemat kahan dekhein? +

Product kholein, Edit par tap karein, phir Purchase history. Wahan har supplier ki aakhri, sab se kam aur average qeemat, aur har khareedari ki tareekh, miqdaar aur qeemat nazar aati hai.

Kya purani sales ka munafa badal jata hai? +

Nahi. Har sale par us din ki purchase price save hoti hai. Qeemat baad mein badle to bhi purana munafa wahi rehta hai.

Stock zero ho ya price khali chhor doon to kya hota hai? +

Stock zero ho to nayi qeemat hi lag jati hai. Restock par purchase price khali chhorein to quantity barh jati hai aur average waisa hi rehta hai. Batch wale products mein har batch ki apni qeemat lagti hai.