Accounting That Fits Your Business
Choose FIFO, LIFO, or Average Cost and let IntelliDrive OS automatically calculate your Cost of Goods Sold on every sale. No spreadsheets, no manual journal entries, no guesswork.
Three Methods. One Click to Switch.
Every business is different. Pick the costing method that matches your industry, tax strategy, and reporting needs.
FIFO (First In, First Out)
The oldest inventory costs are consumed first when a sale is made. This method closely mirrors the natural flow of goods — the first items you purchase are the first ones sold.
Example
You buy 10 locks at $8 each, then 10 more at $10. When you sell 5, FIFO uses the $8 cost — your COGS is $40.
Best for: Businesses with products that have expiration dates, model years, or where older stock should move first.
- Matches natural inventory flow
- Lower COGS when prices are rising
- Higher reported profit margins
- Preferred by most accountants
LIFO (Last In, First Out)
The newest (most recent) inventory costs are consumed first. This means your Cost of Goods Sold reflects the most current market prices, which can reduce taxable income when prices are rising.
Example
Same purchase — 10 at $8, then 10 at $10. When you sell 5, LIFO uses the $10 cost — your COGS is $50.
Best for: Businesses looking to minimize taxable profit during inflationary periods, or where replacement cost matters more than historical cost.
- Reflects current replacement costs
- Higher COGS when prices rise
- Can reduce taxable income
- Better cost matching in inflation
Average Cost (Weighted Average)
All purchase costs are blended into a single weighted average. Every unit in stock carries the same cost per unit, regardless of when it was purchased. This is the simplest method to understand and maintain.
Example
You buy 10 at $8 and 10 at $10. Average cost = $9/unit. Selling 5 units gives COGS of $45.
Best for: Businesses with uniform products, stable pricing, or those who want the simplest accounting setup with minimal complexity.
- Simplest to understand & manage
- Smooths out price fluctuations
- No need to track individual lots
- Great for uniform product lines
How It Works
Set up in under a minute. Runs automatically from there.
Choose Your Method
Go to Settings → Accounting and select FIFO, LIFO, or Average Cost. You can switch methods at any time.
Seed Existing Inventory
Click "Seed Cost Layers" to create initial cost records from your current stock using each product's supply price.
Cost Layers Build Automatically
Every purchase order, manual adjustment, or inventory count gain creates a new cost layer with the unit cost at time of receipt.
COGS Calculated on Every Sale
When a sale is made, IntelliDrive consumes cost layers using your chosen method and records the exact cost per item sold.
Built for Real Businesses
Every edge case is handled — voids, refunds, transfers, manual adjustments, and inventory counts all update your cost data automatically.
Per-Lot Cost Tracking
Every purchase order creates a distinct cost layer so you always know exactly what each batch of inventory cost you.
Automatic COGS on Sale
No manual journal entries. Cost of Goods Sold is calculated instantly using your chosen method every time a sale completes.
Void & Refund Reversal
When a sale is voided or fully refunded, cost layers are automatically restored — your books stay accurate without manual corrections.
Transfer Cost Tracking
When inventory moves between outlets, the cost travels with it. The destination gets a cost layer at the same unit cost as the source.
Fallback to Supply Price
If cost layers are exhausted (more sold than tracked), the system falls back to the product's supply price — no zero-cost gaps.
One-Click Seed
Retroactively create cost layers from existing inventory. Uses current supply prices so you can start tracking COGS immediately.
Quick Comparison
| FIFO | LIFO | Average | |
|---|---|---|---|
| Cost layers consumed | Oldest first | Newest first | Weighted blend |
| COGS in rising prices | Lower | Higher | Middle |
| Profit in rising prices | Higher | Lower | Middle |
| Complexity | Medium | Medium | Low |
| Best for tax savings | No | Yes (inflation) | Neutral |
| Tracks individual lots | Yes | Yes | No (blended) |
Ready to Know Your True Margins?
Stop guessing what your products cost you. Start tracking COGS automatically on every sale.
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