QuickBooks Enterprise can be set up to use the average cost of items to compute values or first in first out. FIFO provides a method of calculating the total worth of your inventory. With FIFO enabled, average cost is turned off and your inventory calculations are based on the assumption that you sell items in the order you have purchased them. This can be useful when you have older items that have a significantly different value than newer items.
Click "Edit" and "Preferences." Select "Items & Inventory."
Click the "Company Preferences" tab.
Select the "Advanced Inventory Settings" button and select the "Use FIFO Staring On" option. Select a date to start calculating FIFO costs. Average costing is used to calculate any inventory values before the start date.
Click "OK" and "OK" again.
Information in this article applies to QuickBooks Enterprise 2013. It may vary slightly or significantly with other versions or products.