search-icon

Costing methods affect how the total value of your inventory in your accounting records is calculated over the course of time. DEAR uses actual accounting costing methods. The costing method applied to a product affects the order in which stocks are picked


DEAR allows the following costing methods:

  1. FIFO
  2. FIFO - Serial Number
  3. FIFO - Batch
  4. FEFO - Serial Number
  5. FEFO - Batch
  6. Special - Batch
  7. Special - Serial Number.


Table of Contents


Costing Method is set and changed from the product detail screen (Inventory →  Products →  [selected product]).


NOTE: Changing the Costing Method of a product while there is an uncompleted transaction in process (e.g. adding payment to a PO that was invoiced and received some time ago) is a very common source of errors. To solve this error, the costing method must be changed back to what it was at the start of the transaction. 


NOTE: DEAR does not currently support checking/enforcing uniqueness of serial numbers, and it is possible to enter duplicate serial numbers into the system. Please be aware of this when carrying out inventory operations. This is an active feature request on our forum. You can make and vote for feature requests on our forum; requests are reviewed based on popularity and importance for inclusion in future development releases.


FIFO methods

[back to top]

  • FIFO
  • FIFO - Serial Number
  • FIFO - Batch


Use the 'First-In First-Out' Inventory Costing Method to determine the value of goods sold where in the first batch of purchased inventory there will be the first ones to be sold. The first goods that were purchased are going to be the first cost that will be associated with the sale. This method normally assumes that the oldest goods are sold first, but the physical movement of goods does not necessarily have to follow this order. FIFO "In" date is measured from the Date Received field of stock received, NOT the date of stock received authorisation. 


Variation FIFO does not allow a batch or serial number to be maintained for that product. Variations FIFO - Serial Number and FIFO - Batch make the Serial number/Batch field mandatory. The serial/batch number must be specified in the Pick stage of the sales process as well as the Stock Received of the purchase process. 


Learn more about FIFO Costing Method.


Change FIFO picking preference with stock transfers

[back to top]

When transferring stock, Stock Received Date can either be maintained during transfers or replaced by Transfer Completion Date. This can be used in multiple ways to move around the stock and the picking preferences to bring up stock that you want to release ahead of the natural FIFO order.


When products have a FIFO costing method, products that have been received into your inventory are picked before products that have been received later. Consider two units of the same product, A and B, where A has been received earlier than B. After unit B has been received, unit A is transferred to another location. 

  1. When this setting is disabled, when unit A is transferred to a different location it will maintain its original stock received date and will be picked before unit B.
  2. When this setting is enabled, when unit A is transferred to a different location, stock received date will be replaced with transfer completion date. Unit B now has the earlier stock received date, and will be picked before unit A. 


The setting, Update Stock Received Date with Transfer Completion Date, is controlled from Settings → General Settings → Products & Measurements Settings.


FEFO methods

[back to top]

  • FEFO - Serial Number
  • FEFO - Batch


Use the 'First-Expired First-Out' Inventory Costing Method when material requirements are serviced in the order of items with the earlier date of consumption regardless of the date of entry or acquisition.


FEFO is mainly used in the food industry and where it is required to monitor the expiration date or period of durability. If a batch or serial number is not specified, DEAR will automatically generate batch numbers for the product. The serial/batch number must be specified in the Pick stage of the sales process as well as the Stock Received of the purchase process. An expiry date must be specified for products with this costing method. 


Learn more about FEFO Costing Method


Special methods

[back to top]

  • Special - Batch
  • Special - Serial Number


Special methods require a batch or serial number to identify products and are not affected by when the items were added to your inventory. If a batch or serial number is not specified, DEAR will automatically generate batch numbers for the product. The serial/batch number must be specified in the Pick stage of the sales process as well as the Stock Received of the purchase process. A product can be selected via serial/batch number regardless of when it was purchased or when it expires. 


Batches and serial numbers

[back  to top]


Batches: The DEAR Inventory system is capable of tracking goods sold, using an assigned Batch number, once the sold items are invoiced. This will allow the user to trace goods in case a recall occurs or the customer requires any information about the product/batch sold to them. 


Serial Numbers: Adding serial numbers to your product is extremely helpful to your business because:

  • Each product will have its own unique identifier and can be easily verified whenever there is a product return. You can also make sure that the product returned is from your store.
  • It makes handling of warranty and claims simple.
  • Your business’ product reporting will be accurate up to the Serial number level.
  • Search within your Inventory or past Sale and Purchase Orders will be easier and save you time looking for a specific product.


Changing the costing method

[back  to top]


Changing the costing method of a product in DEAR depends on the current costing method and the new costing method.


It is possible to change between some costing methods directly from the product details page.  


Users will need the Inventory → Products & Families permission to change the costing method. 


NOTE: A non-serial costing method cannot be changed to a serial numbered costing method for a SKU that has existing transactions (purchase, sale, assembly, production, write-off,  stock adjustment, etc) . If you need to change a product to a serial numbered costing method, you will need to create a new SKU for that product. 


The following costing method changes can be carried out from the product page:

  • NOTE: Batch #/Expiry date will only be applied to stock that has no previous batch/serial # record. If stock has previously had a batch/serial #, switching to Batch costing method will use the previous batch/serial  #  record. 
Current costing methodNew costing methodAllowed to change from product page?Action
FIFOFIFO - BatchYESEnter batch number (mandatory) and Expiry Date (optional) which will be applied to stock which has not previously had a batch/serial #. 
FIFO - Serial NumberNOA non-serial number cannot be changed to a serial numbered costing method.
FEFO - BatchYESEnter batch number (mandatory) and Expiry Date (optional) which will be applied to stock which has not previously had a batch/serial #. 
FEFO - Serial NumberNOA non-serial number cannot be changed to a serial numbered costing method.
Special - BatchYES Enter batch number (mandatory) and Expiry Date (optional) which will be applied to stock which has not previously had a batch/serial #. 
Special - Serial NumberNOA non-serial number cannot be changed to a serial numbered costing method.
FIFO - BatchFIFOYESBatch #/Expiry date will not be applied.
FIFO - Serial NumberNOA non-serial number cannot be changed to a serial numbered costing method.
FEFO - BatchYESExisting batch numbers and expiry dates are preserved.
FEFO - Serial NumberNOA non-serial number cannot be changed to a serial numbered costing method.
Special - BatchYES Existing batch numbers and expiry dates are not preserved, new batch numbers and expiry dates must be added. 
Special - Serial NumberNOA non-serial number cannot be changed to a serial numbered costing method.
FIFO - Serial NumberFIFO YESBatch #/Expiry date will not be applied.
FIFO - BatchYESExisting batch/serial numbers and expiry dates are preserved.
FEFO - BatchYESExisting batch/serial numbers and expiry dates are preserved.
FEFO - Serial NumberYESExisting batch/serial numbers and expiry dates are preserved.
Special - BatchYES Existing batch/serial numbers and expiry dates are preserved.
Special - Serial NumberYESExisting batch/serial numbers and expiry dates are preserved.
FEFO - BatchFIFOYESBatch #/Expiry date will not be applied.
FIFO - BatchYESExisting batch/serial numbers and expiry dates are preserved.
FIFO - Serial NumberNOA non-serial number cannot be changed to a serial numbered costing method.
FEFO - Serial NumberNOA non-serial number cannot be changed to a serial numbered costing method.
Special - BatchYES Existing batch/serial numbers and expiry dates are preserved.
Special - Serial NumberNOExisting batch/serial numbers and expiry dates are preserved.
FEFO - Serial NumberFIFO YESBatch #/Expiry date will not be applied.
FIFO - BatchYESExisting batch/serial numbers and expiry dates are preserved.
FIFO - Serial NumberYESExisting batch/serial numbers and expiry dates are preserved.
FEFO - BatchYESExisting batch/serial numbers and expiry dates are preserved.
Special - BatchYES Existing batch/serial numbers and expiry dates are preserved.
Special - Serial NumberYESExisting batch/serial numbers and expiry dates are preserved.
Special - BatchFIFOYESBatch numbers will be discarded.
FIFO - BatchYESExisting batch/serial numbers and expiry dates are preserved.
FIFO - Serial NumberNOA non-serial number cannot be changed to a serial numbered costing method.
FEFO - BatchYESExisting batch/serial numbers and expiry dates are preserved.
FEFO - Serial NumberNO A non-serial number cannot be changed to a serial numbered costing method.
Special - Serial NumberNOA non-serial number cannot be changed to a serial numbered costing method.
Special - Serial NumberFIFO YESSerial numbers will be discarded.
FIFO - BatchYESExisting batch/serial numbers and expiry dates are preserved.
FIFO - Serial NumberYESExisting batch/serial numbers and expiry dates are preserved.
FEFO - BatchYESExisting batch/serial numbers and expiry dates are preserved.
FEFO - Serial NumberYES Existing batch/serial numbers and expiry dates are preserved.
Special - BatchYESSerial numbers will become batch numbers, expiry dates will be maintained. Enter Expiry date (optional) to be applied to entire stock without an expiry date.  


Recommend and enforce picking in FIFO/FEFO order

[back to top]


While auto-pick actions choose stock in line with FIFO/FEFO costing methods, DEAR web portal and WMS application allows pickers to scan and select any batch/serial number while picking stock for sale order fulfillment, assembly orders, or stock transfers. 


DEAR allows you to select whether validation is applied to check that picked items with batch or serial numbers are in line with FEFO/FIFO rules before authorising a pick.


Users can choose to warn a user if picked items are not the first in/first expired units, and recommend which batch/serial numbers should be picked instead upon authorising the pick. It is also possible to enforce picking of first in/first expired units rather than just warning. 


The settings are controlled from Settings → General settings → Products and measurements settings.


Recommend batch/serial no. for FIFO/FEFO

This setting applies to sale order fulfillment, stock transfers, and assembly orders, both in DEAR web portal DEAR WMS application. It does not apply to components for production however this is planned for a future release. The following options are available:

  • Don’t recommend: No warning or restrictions will be displayed if first in/first expired stock has not been selected. 
  • Recommend and warn: System will direct WMS picker to bins containing the first in/first expired stock. Upon pick authorisation, a warning message will display if stock picked from the bin is not first in/first expired according to product costing method, and the recommended batch/serial no. of first in/first expired stock. User can ignore the warning and pick selected stock, or remove picked items to pick first in/first expired stock. 
  • Recommend and enforce: System will direct WMS picker to bins containing the first in/first expired stock. Upon pick authorisation, a warning message will display if stock picked from the bin is not first in/first expired according to product costing method, and the recommended batch/serial no. of first in/first expired stock. User must remove picked items to pick first in/first expired stock.


Exclude expired batch/serial numbers

When enabled, system actions such as auto-pick, batch/serial no. recommendation, and auto-consume for production will exclude any stock with expired batch/serial no. This does not apply validation to manual scanning/selection of stock.


Did you find it helpful? Yes No

Send feedback
Sorry we couldn't be helpful. Help us improve this article with your feedback.