The FIFO/LIFO ReportMay 9th, 2018
Learn a variety of ways to calculate your stock valuations.
APT University: The FIFO/LIFO Report
Hello and welcome to APTU, this week we’ll be working with the Fifo/Lifo report, which allows you to view your cost for a product based either on a Fist in first out average, the last in first out average, the moving average, or the last cost paid on a primary vendor bill. This is an alternative to our typical inventory value report because it determines costing in a different way.
We do APTU every week at 12 noon, so you might want to subscribe. We will be taking any questions at the end of the presentation, so if you do have a question. Feel free to enter it into the live chat panel, and if you’d like to learn more about advancepro we have nearly 100 APTU videos on advanceprotech.com under the resources tab, or on our youtube channel.
So the Fifo/Lifo report is found under the Admin tab in the utilities section. And you’ll find it under the Fifo/Lifo tab. Now what this is going to do is give you the capability to see the average cost just for the product you actually have on hand. Where our other inventory reports will show the long-term average cost, this report will calculate the cost of the product you’re actually holding, based on your most recent purchases.
So first we have warehouse and category filters, we can set the date, so if we wanted we could see the costing of the inventory we had on hand at the first of last month, or the first day of the year, and down at the bottom we can set how we want the cost calculated, and we have four options.
Option 1: FIFO – this stands for first-in-first-out, and this is also a common policy for any industry where product might expire. In this case, what this will do, is look at the order you purchased products in, and the cost you purchased them at, and then, on the assumption that you always shipped the oldest product first, calculate out an average price for the goods you have on hand. So if you have been buying and selling an item for years, but currently only have 100 on hand, then it will use the average price for the last 100 units of that product to come through your door, if your last purchase was more than 100 units in this case, then your FIFO cost is the last price paid.
Option 2: LIFO – this is slightly more complex, this assumes that you are always selling the newest product First, and that your old stock will hold onto it’s original value. So if you buy 10 units of product at 100 dollars each and there’s a big sale and you buy 10 more at 50 dollars each. We’re going to calculate the average in this case as if you sell the 50 dollar units first, so each unit will get more expensive on average as you sell them.
Option 3 is the moving average, which is simply the long term average cost of the product through it’s history in advancepro.
And finally Option 4 is the price on the last Primary vendor bill, so you can think of this as always valuing your stock on the last price paid.
So this report gives you a variety of ways to calculate your stock valuations that really go beyond the standard capabilities throughout advancepro, and throughout quickbooks, allowing you to most effectively manage your margins and make smarter business decisions.
This concludes our tour of the FIFO/LIFO report features, thanks for watching!