FIFO Setup

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Overview

Prior to performing any major function such as initializing FIFO data, it is advisable to back up the store data file.

FIFO stands for "First In, First Out" and refers to a method of tracking the cost of goods. When FIFO is enabled, the program tracks the cost of incoming and outgoing inventory. As orders are created, the program allocates the oldest product units to fill the order. If the unit cost changes as inventory is replenished, the number of units at the new price point is recorded in the FIFO table.

FIFO initialization should only be run once, and you cannot initialize FIFO from QuickBooks or from data in an external MS Access database.

The current FIFO data for a particular product can be viewed by selecting the FIFO Status link on the Item tab of the Inventory screen. This link is not visible unless FIFO is enabled.

Best practices

Make a backup copy of the store data file before initializing FIFO.
Initialize FIFO during off-hours when the program is not in use to process orders, receive inventory, etc.
Make sure you have accurate ATP counts for all products before initializing FIFO. Perform cycle counts for all products at all warehouses.
Review the supplier's unit cost for all products before initializing FIFO.

Description of the screen

Initialize FIFO Data

Initialize Data

uses the current ATP and Supplier Cost data in the program's inventory tables to establish the beginning FIFO levels

Enable and initialize FIFO data

Prior to performing any major function such as initializing FIFO data, it is advisable to back up the store data file.

You can enable FIFO several ways:

by setting system parameter TrackInventoryFIFO = TRUE
by going to the Store Setup Wizard>Accounting Options>Page 1 and select the box labeled Track your Cost of Goods on a FIFO (First In First Out) basis. This immediately sets system parameter TrackInventoryFIFO equal to TRUE, without having to select the Save and Exit button on the Store Setup Wizard screen.

You can initialize FIFO at several locations in the program:

Go to Main Menu>Settings>Inventory Functions>FIFO Setup.

Go to Main Menu>Settings>System Functions>Store Setup Wizard>Accounting Options>Page 1.

Select Initialize FIFO. If this is the first time you are initializing FIFO data you see the following message:

If you have already initialized FIFO data, you see this warning message:

Select OK to proceed with the changes.
The program displays a message box confirming the completion of the changes.

Select OK to acknowledge the process is complete. The Initialize FIFO Data screen is closed.
Make another backup copy of the store data file after the FIFO data is initialized.

Viewing current FIFO data for a product

Go to the Inventory screen and navigate to the desired product record.
Select the Item tab.
Select the FIFO Status link in the Accordion. This link is not visible unless FIFO is enabled.

The program displays a message box with FIFO information for that product. If some units of the product were received at different cost levels, they would each be listed in this message box.

Select OK to close the message box.

FIFO cost reporting

Cost data for items already sold is determined by averaging the costs associated with each FIFO record for a particular product that was allocated to an order, while FIFO costs for inventory that is presently in stock reflects the cost that was recorded when the merchandise was received from the vendor, or otherwise entered by the user. Therefore, the data contained in reports which are based on sales may not seem to jive with the data contained in reports that are based on the cost of the current inventory.
The reports, Inventory Value - New and Inventory Value by Supplier show FIFO costs for products, which are based on the cost information provided by the Primary Supplier of the item. If no Primary Supplier is designated, the program uses the lowest cost from any of the supplier records associated with the item.
Returns which occur in a different month than when the item was purchased change the contents of some of the older standard reports, such as the Sales Summary report, depending on when the report is generated.
Reports FIFO Inventory Details by Supplier and FIFO Inventory Value by Supplier are also provided.

Additional information

Inventory

Created: 8/11/12

Revised: 7/31/15

Published: 08/19/15