ConnectBooks uses FIFO (First-In, First-Out) to manage inventory costs. FIFO starts when you enter a bill, ensuring the oldest costs are always applied first, keeping reports accurate and aligned with how inventory moves.
How FIFO Works
Bills & Adjustments: When you enter a bill/adjustment, the system records the item cost. These costs are used in order, oldest first.
Orders: Sales use the cost of the oldest available inventory.
Refunds: Refunds return items at their original order cost. The next sale will use this refunded cost first.
Amazon Adjustments/Reimbursements: If tied to a specific order, the original cost from that order is applied.
Example Flow:
Bill 1 → $1 cost items.
Order 1 → sells those $1 items.
Bill 2 → $2 cost items.
Order 2 → sells the $2 items.
Refund from Order 1 → $1 item returned.
Next order → uses that $1 refunded cost first.
Handling Special Cases
If no order ID exists (e.g., certain refunds/reimbursements), ConnectBooks applies costs in this order:
Last Purchased Cost
Item Cost (set at item level)
Null (left blank until a bill/adjustment sets cost)