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Report Inventory Costs Using FIFO

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Report Inventory Costs Using FIFO

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Report Inventory Costs Using FIFO

Report Inventory Costs Using FIFO

The program allows you to report using FIFO (first in, first out) for accounting purposes. To enable this feature,

1. Go to: Setup > System Options
2. Select the Professional tab > In the Options section, check the box next to the Report inventory costs using FIFO option
3. Select OK to save your changes

How FIFO Affects Inventory Costs

Enabling FIFO changes how the program calculates:

Cost of Goods Sold (COGS)
Item unit cost
Total inventory value in reports

Example of FIFO Calculation

Scenario:

Purchase 4 items at $10.00 each
Vendor reduces cost to $9.75
Purchase 5 more items at $9.75 each

With FIFO Enabled (Average Cost Calculation)

The system calculates an average unit cost:

$\times 10.00 + 5 \times 9.75) \div 9 = 9.86$

Unit Cost: $9.86
Total Cost: $9.86 × 9 = $88.74

Without FIFO Enabled

The system uses the most recent cost stored in inventory:

Unit Cost: $9.75

Total Cost: $9.75 × 9 = $87.75

Important Note About FIFO in the Program

The system stores cost and quantity for up to three (3) price changes and applies FIFO by selling the oldest inventory first
If an item’s cost changes more than three times, the system will switch to using average costing for calculations

Updated on June 25, 2026

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