FIFO
FIFO (first in, first out) is an inventory costing method where the oldest stock is assumed to be sold or used first. In Peasy, FIFO is the costing method used to calculate cost of goods sold and inventory valuation.
How It Works in Peasy
- When you receive inventory, Peasy records the cost per unit for that batch
- When inventory is consumed (sales, production, adjustments), the oldest costs are used first
- Lot tracking works naturally with FIFO — lots received earlier are drawn down before newer ones
- Inventory valuation reports reflect FIFO-based costs
- COGS on fulfilled sales orders uses the FIFO cost of the units shipped
Why It Matters
FIFO provides an accurate, consistent way to value your inventory and calculate profit margins. It's the most common method for perishable goods and is generally accepted for tax and accounting purposes. Peasy handles FIFO automatically so you never have to calculate it manually.