Choose a costing method
Decide how the cost of goods sold is worked out as stock moves.
Find the Costing Method
When adding or editing a product, the Costing Method field sits next to the cost and selling prices.
Standard (fixed cost)
Always uses the cost price you typed in. The simplest option — good when your buying price rarely changes.
AVCO, FIFO or LIFO
These work the cost out from your real stock movements: AVCO averages your costs, FIFO uses your oldest stock first, LIFO uses the newest first.
Why it matters
Your choice affects the profit and cost-of-goods figures in your accounts, so pick the one that matches how you actually buy and sell.