Fleet maintenance software Fleetio has added new inventory valuation methods to its offerings: LIFO / FIFO (last-in first-out, first-in first-out). LIFO / FIFO is an accounting method for customers to determine inventory costs. Companies that buy and resell units can the use method to determine when parts came in and when they left, according to a Fleetio press release.
The LIFO method assumes that the last unit to arrive in inventory is sold or used first, with the older inventory left over at the end of the accounting period. The FIFO method assumes that the first unit making its way into inventory, or the oldest inventory, is sold or used first.
With LIFO / FIFO, a fleet that keeps parts available for vehicle repair or performs in-house maintenance can attribute the cost of parts to specific vehicles to provide full view of the total cost of ownership. Technicians can now account for costs on work orders based on the price of the part at the time of purchase, which can fluctuate, according to the release.
See also: The right information leads to better inventory management
"The FIFO/LIFO inventory valuation feature is necessary to track the value for financial reporting purposes and internal controls over the assets. It is easy to track, and the valuation feature works well,” says Robin Patterson, deputy director of fleet services for the City of Harris County, Texas.
