Inventory Costing Methods

Costing is selected at product level. Existing stock transactions may restrict a later change. Compare the method with the physical pick and finance policy before receiving.

1. 1
   Open the product and review Costing / Pick Order.
2. 2
   Choose FIFO, FEFO, LIFO, or Average to match your operating policy.
3. 3
   Save before receiving stock, then compare later inventory value with Finance.
4. 4
   Preview how the chosen method would use existing or incoming cost information.
5. 5
   Ask Finance to review a representative receipt and shipment after setup.

Changing a costing choice after transactions can affect interpretation of inventory value.

For each remaining cost layer, multiply units by unit cost to find its value. Sales and adjustments use the product's chosen method. The product form offers FIFO, FEFO, LIFO, and Average; it does not offer Standard costing.

WARNING: Do not change a costing method to correct a past posting. Reconcile existing layers and the GL first; use an approved correction transaction.

Check whether the product already has stock activity. Do not change the method to hide a prior posting difference.