# Stock Valuation > Learn how PurchasePlus decides which price to use when Goods are Received into Inventory, and how that price flows into your Stock Values. Source: https://www.purchaseplus.com/docs/for-purchasers/how-stock-is-valued-when-receiving-goods Markdown: https://www.purchaseplus.com/docs/for-purchasers/how-stock-is-valued-when-receiving-goods.md # Stock Valuation _Learn how PurchasePlus decides which price to use when Goods are Received into Inventory, and how that price flows into your Stock Values._ **The short version: when you Receive Goods to Inventory, PurchasePlus values them at the most accurate price it has at that moment. If the Supplier's Invoice is already in the system, the Invoice price is used.** **Please note:** This article describes the behaviour of the Inventory module in PurchasePlus. The Inventory module in PurchasePlus has been redesigned, and is materially different to the Legacy PurchasePlus Inventory module. **The Order of Preference** The price posted to Inventory is always the price on the Receiving Note line at the moment the Receiving Note is completed. PurchasePlus pre-fills that price using the best information available: 1. **Invoice price.** If an Invoice line has been linked to the Purchase Order line in PurchasePlus, the invoiced price is used. This is the actual charged price, so it is the best price available. Note that the Invoice must be linked at line level. An Invoice that simply matches the Purchase Order is not enough, and the linked Invoice line does not need to be for the same Product. 2. **Purchase Order price.** If no Invoice line is linked, the price from the Purchase Order is used. This is what your Organisation agreed to pay, so it is the best estimate available at the time of Receiving. The receiver can overwrite the pre-filled price on any line before completing the Receiving Note. This is useful when the invoice has not yet arrived but a delivery docket shows the actual price, or for weight-based items where the delivered weight or price differs from what was ordered. Whatever price is on the line when the Receiving Note is completed is the price that posts to Inventory. **Why This Matters for Inventory Value** Inventory in PurchasePlus is valued on a weighted average. Every receipt blends into the average Unit Value of that Stock Item at that Stock Location. This means the price used at the moment of Receiving flows directly into your Stock Values, and from there into Stocktakes, variance reporting, and Recipe costing for Inventory Recipes. You can view the current Unit Value and Total Value of your Stock Items at any time by navigating to \[Inventory\] → \[Stock Locations\] and clicking into a Stock Location. See our Introduction to Inventory, Part 3: Stock Locations article to learn more. **What Happens When the Invoice Arrives Later** This is the key point to understand. In hospitality it is completely normal for Goods to arrive before the Invoice does. In that case, the receipt is valued at the Purchase Order price. If the Invoice later arrives at a different price, the Inventory value is **not retrospectively adjusted**. PurchasePlus does not go back and reprice stock that has already been Received. Instead, the difference between the Purchase Order and the Invoice is picked up automatically by the Invoice Match, and highlighted in the form of Invoice Flags for your Accounts Payable team. See our Introduction to Receiving Notes article to learn more about how discrepancies are flagged. **A Worked Example** A hotel Orders 10 cartons of chicken at $50.00 per carton. The Goods arrive on Monday, but the Invoice has not yet arrived. - The receipt posts 10 cartons into stock at $50.00 each ($500.00 in total), based on the Purchase Order price. - The Invoice arrives on Wednesday at $52.00 per carton. The Invoice Match flags the $2.00 per carton difference against the Purchase Order, and the Accounts Payable team resolves it. - The stock already on hand stays valued at $50.00 per carton. The $20.00 difference is not pushed into Inventory, but the next receipt (and eventually the Stocktake) brings the average back in line with reality. If instead the Invoice had been in the system **before** the Goods were Received, the receipt would have posted at $52.00 per carton straight away. **Examples in Practice** **1\. Invoice price used (the Invoice was in the system at the time of Receiving)** A hotel Receives 1,800 units of tissue paper against a standing Purchase Order. The Purchase Order price was $1.6400 per unit, but several Invoices had already arrived in PurchasePlus at $1.6389 per unit before the Receiving Note was completed. The stock was valued at the invoiced price of $1.6389, not the Purchase Order price. A small difference, but a clean demonstration of the first tier winning. **2\. Purchase Order price used, with the Invoice arriving later at a different price** A resort completes a Receiving Note in the evening, before any Invoice has arrived. Every line goes into stock at the Purchase Order price. The invoice arrived two days later, and one beverage line that was Ordered at $56.60 per unit was invoiced at $63.30. The 10 units sit in stock at $56.60, and the $6.70 difference is never pushed back into Inventory. It surfaces on the Invoice Match instead, where the Accounts Payable team can resolve it against the Supplier. **The One-Line Takeaway ** **Invoice price where we have it, Purchase Order price where we don't. The Invoice Match makes sure any difference is seen and resolved, even though stock already Received is not repriced.** **Related Articles** - Receive Goods from a Purchase Order - Introduction to Receiving Notes - Introduction to Inventory, Part 2: Stock Items - Introduction to Inventory, Part 3: Stock Locations - Introduction to Inventory, Part 5: Stocktakes If your Organisation would like to begin using the PurchasePlus Inventory module, please contact your Account Manager or our friendly Customer Success Team for assistance with enabling the module, and to organise training for your users (if required).