what s the difference between fifo and lifo 
fifo first in first out refers to an accounting system that assumes the oldest products are sold first followed by newer ones lifo last in first out assumes the most recent products are sold before older ones the bottom linebusinesses increasingly track inventory using a perpetual inventory system vs the older physical count periodic inventory system perpetual systems are costly to implement but less expensive and time consuming over the long haul despite the advantages of a continuously updated estimate of stockage and the interconnectivity of accounting systems a major drawback of perpetual systems is the inability to track lost damaged or stolen items many companies counter this with periodic partial inventory counts which provide a baseline for the perpetual system and are designed to provide a full physical inventory by the end of the period small and medium sized companies or those with small physical inventories continue to use the periodic inventory system though many are opting for low cost perpetual inventory systems large companies companies with multiple locations and those with large physical inventories have largely converted to perpetual systems since they can absorb the high startup costs and realize savings through the minimal use of labor that comes with a perpetual system 