Right now setting up opening balances for inventory items involves extra step (if you want them to be capitalized on balance sheet). But in exchange, it makes your inventory figures a lot easier to understand and troubleshoot down the line when you accumulate a lot of inventory transactions.
What I’m trying to achieve here is that I want businesses to focus on tracking their quantities correctly because that is all that matters.
The balance of their inventory on hand is simply quantity owned multiplied by Average cost.
Average cost is not calculated automatically, it is to be manually entered. Although there is a revaluation worksheet to suggest what your average cost seems to be for each inventory item based on past transactions. For many businesses, they might be updating their average cost for their inventory items once a year only. And for businesses who are not interested in capitalizing their inventory items, they never do it.
Yes - periodic inventory revaluation is slightly less automatic. But counter-intuitively it will cost you less time doing bookkeeping in long run.
I admit I’m struggling to sell benefits of periodic inventory revaluation to users who are perfectly happy with automatic inventory revaluations. It’s only when they experience issues when their figures appear to be wrong and have no idea how to troubleshoot or fix, then I explain how this would never happen under periodic inventory revaluation and it’s only then when they want to make a switch.