So many Costs

Ramsys simultaneously maintains many levels of costs - all for different reasons, below is a short explanation of these costs and the part they play in the system.


  • Negotiated Cost: This is the price agreed upon between the supplier and the business for a specific product. It’s often set through negotiations and may include discounts or special terms that differ from standard pricing. The negotiated cost helps businesses maintain a consistent pricing structure, even if supplier prices fluctuate. Stock receipting may be set to only accept this price if required thus eliminating cost creep. This cost is optional
  • Last Cost: The last cost represents the price paid during the most recent purchase of a product in the local currency. It reflects the last transaction amount, helping businesses understand the most current pricing history. This cost is useful for assessing recent trends and variations in supplier pricing over time.
  • Average Cost: The average cost is calculated by taking the total cost of a product onhand and dividing it by the total quantity acquired. It provides a balanced view of product costs over time, smoothing out price fluctuations. This metric is valuable for determining the overall expenditure on inventory and for making long-term pricing decisions. See below for a full explanation of Average Cost
  • Foreign Currency (FOREX) Cost: The FOREX cost is the cost of purchasing an item in a foreign currency, converted into the negotiated cost at local currency based on current exchange rates. While optional this cost is critical when dealing with international suppliers, as it accounts for currency conversion, helping to maintain accurate inventory valuation and manage the impact of exchange rate changes.
  • Effective Cost: The effective cost is calculated in real time and is not stored. It is used to determine the best cost by finding the first available (non-zero) cost, following one of two formats:
    • For most functions: First, it checks the Average Cost, then the Last Cost, and finally the Fixed Cost.
    • For Orders and Receipting: The sequence is Last Cost, then Average Cost, followed by the Fixed Cost.


These costs provide a comprehensive view of a product’s pricing at all levels of detail, allowing businesses to make informed decisions regarding purchasing, pricing, and profitability.