Lot – Based Inventory Management (FIFO) #

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🔄 What Is FIFO? #

FIFO stands for First-In, First-Out, an inventory management method where the oldest stock (first purchased) is sold first. This approach is especially useful for businesses dealing with perishable goods, ensuring that older items are used before newer ones.

How FIFO Works #

First Purchase Order (Lot 1): You bought 5 items at $50 each.

• When the first 5 items are sold, the system will record the cost of $50 per item. The quantity in this lot will decrease accordingly.

Second Purchase Order (Lot 2): You bought 10 items at $60 each.

• After all 5 items from Lot 1 are sold, any subsequent sales will pull from Lot 2, and the system will record the cost as $60 per item.

🧾 Example of FIFO in Action #

Suppose you have:

• Lot 1: 20 items at $5 each
• Lot 2: 10 items at $4 each

When a sale occurs, the system will:

1. Deduct items from Lot 1 first, recording the cost of $5 per item.
2. Once Lot 1 is depleted, it will then deduct from Lot 2, recording the cost of $4 per item.

This method ensures that older inventory (from Lot 1) is sold before newer inventory (from Lot 2), maintaining product freshness and adherence to FIFO principles.

⚙️ Enabling Lot-Based Inventory Management #

To implement FIFO in Lifelong POS, you need to enable Lot-Based Inventory Management:

1. Log in to Lifelong POS.
2. Navigate to Settings > General Settings.
3. Under Lot-Based Inventory Management, toggle the setting to Enable.

🛒 Creating a Purchase Order with Lot Quantities #

When adding products to your inventory, specify the lot quantities:

1. In Lifelong POS, go to Purchase Orders > + New Purchase Order.
2. For each item, enter the Lot QTY (quantity per lot) and the cost.

Example:

• Lot 1: 20 items at $5 each
• Lot 2: 10 items at $4 each

📦 Managing Inventory Counts with Lot Breakdown #

To ensure accurate stock levels, perform regular counts:

1. Navigate to Items > Count.
2. Start a new count and reconcile discrepancies (Start count > Reconcile).
3. The Lot Breakdown feature will display the distribution of items across different lots, helping you adjust quantities accurately.

Step 7 #

Step 8 #

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