What is FIFO (First In, First Out)?
FIFO is the stock rule that the oldest stock is sold first.
Updated
Meaning
English
FIFO is the stock rule that the oldest stock is sold first.
Roman Urdu
FIFO ka matlab hai jo maal pehle aaya woh pehle bike.
Also called first in first out, pehle aaya pehle gaya.
Example
A kiryana receives a new carton of tea while half of last month's carton is still on the shelf. Staff put the new packs behind the old ones, so the older stock sells first.
How it works
FIFO is both a shelf habit and an accounting method. On the shelf, it means older stock goes to the front so nothing sits until it spoils or fades. In accounting, it means the cost of each sale is taken from the oldest purchase still in stock, which matters when supplier prices keep rising, as they often do in Pakistan.
For goods with an expiry date, a stricter rule usually works better: FEFO, first expiry first out, because a newer delivery can sometimes expire sooner than older stock. FIFO is the right default for goods that age but carry no printed expiry, such as garments, shoes, hardware and stationery.
In Nafaa
Nafaa saves the cost on each bill line at the time of sale, and for batch-tracked products it takes stock from the batch with the earliest expiry first, which is FEFO.
Related terms
- FEFO (First Expiry, First Out)
FEFO is the stock rule that the batch with the nearest expiry date is sold or used first, whatever order it arrived in.
- Batch Tracking
Batch tracking records each purchase lot separately with its own expiry date.
- Stock Valuation
Stock valuation is the money value of the inventory a business holds on a date, usually counted at cost.