Allow Option for FIFO or Specific Identification Inventory Costing (Instead of Moving Average Only)
Allow Option for FIFO or Specific Identification Inventory Costing (Instead of Moving Average Only).
Description / Feature Request:
What is the current challenge?
Currently, Xero’s tracked inventory relies solely on Periodic Weighted Average Costing to calculate Cost of Goods Sold (COGS). For businesses that need exact cost matching—such as selling specific product batches, high-value items, or custom transactions—the moving average calculation forces inaccurate COGS entries that do not reflect the actual item cost at the time of sale.
What is the proposed feature?
Give users the flexibility to choose their preferred inventory costing method at the organisation or item level:
FIFO (First-In, First-Out) – Automatically calculate COGS based on the oldest available batch cost.
Specific Identification / Manual Cost Assignment – Allow users to assign or override the exact unit cost on a line-item level when issuing invoices/bills.
Why is this important?
Accurate COGS & Profitability: Ensures Cost of Goods Sold directly reflects the actual purchase price of the stock sold, giving a clear and true P&L report.
Eliminates Manual Workarounds: Removes the need to create complex negative line-item entries or untracked inventory workarounds just to force the right unit cost into the system.
No Third-Party App Dependency: Allows growing businesses with simple batch or actual-cost requirements to manage their inventory natively within Xero without paying for external inventory add-ons.
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