---
title: FEFO vs FIFO: Which Stock Rotation Should You Use?
description: FEFO (first expired, first out) vs FIFO (first in, first out) with examples, when each applies, and why pharmacies, agrovets and beauty shops use FEFO.
url: https://www.poso.co/guides/fefo-vs-fifo/
updated: 2026-10-29
---

Guide · 6 min read

# FEFO vs FIFO: which should you use?

The difference between FEFO and FIFO, with a worked example, and why shops with expiry-dated stock should use FEFO.
By the poso team · Updated 29 October 2026

**Short answer:**
FEFO (first expired, first out) sells or uses the stock with the earliest expiry date first. FIFO (first in, first out) sells the stock that arrived first. They give the same result only when deliveries arrive in expiry-date order. For anything with an expiry date (medicines, vet drugs, agrochemicals, food, cosmetics), use FEFO; FIFO is fine for products without expiry dates.

## Definitions

| Method | Stands for | Rule | Best for |
|---|---|---|---|
| FEFO | First Expired, First Out | Earliest expiry date leaves first | Medicines, vet drugs, chemicals, food, cosmetics |
| FIFO | First In, First Out | Earliest received leaves first | Products without expiry dates; also an accounting cost method |
| LIFO | Last In, First Out | Latest received leaves first | Rarely suitable for physical stock rotation |

## A worked example

A pharmacy stocks amoxicillin capsules. On 1 March it receives batch A expiring in December. On 15 March a second supplier delivers batch B, which expires in September (short-dated, but accepted).

| | Batch A | Batch B |
|---|---|---|
| Received | 1 March | 15 March |
| Expires | December | September |
| FIFO sells first | ✓ (arrived first) | |
| FEFO sells first | | ✓ (expires first) |

Under FIFO the pharmacy keeps selling batch A while batch B sits behind it, and by September some of batch B expires unsold. Under FEFO batch B goes first, and batch A still has months left when B runs out.

## Why deliveries arrive out of order

- Different suppliers carry stock of different ages.
- Distributors clear older stock at a discount.
- Returns from customers or branches come back into stock.
- Transfers between branches move older batches around.

## FEFO in practice

- **Record expiry dates on receipt.** FEFO is impossible without them.
- **Shelve by expiry**: earliest at the front or on top; label boxes with the expiry month in large print.
- **Pick by expiry**: train staff, and use software that chooses the earliest-expiring batch automatically.
- **Review** stock expiring in the next 90 days monthly.
- **Transfer by expiry**: when moving stock between branches, send the earliest-expiring batches to the branch that sells fastest.

## FIFO the accounting method is different

FIFO is also a way of valuing stock in your accounts (the cost of the oldest purchases is charged first). That is a separate decision from how you rotate stock physically. You can value stock by FIFO or average cost in the accounts while rotating stock FEFO on the shelf. Read [pharmacy accounting basics](https://www.poso.co/guides/pharmacy-accounting-basics/).

## FEFO in poso

In poso, products tracked by batch use FEFO automatically: the till, transfers and deliveries take the batch with the earliest expiry date first, and the Home dashboard shows batches expiring in the next 90 days. See [batch and expiry tracking](https://www.poso.co/features/batch-and-expiry-tracking/).

## FEFO and FIFO questions

### What is FEFO?

FEFO means First Expired, First Out: the stock that expires first is sold or used first, regardless of when it arrived.

### What is the difference between FIFO and FEFO?

FIFO sells the oldest-received stock first; FEFO sells the earliest-expiring stock first. They differ whenever a later delivery has an earlier expiry date.

### Should pharmacies use FIFO or FEFO?

FEFO. Medicines have expiry dates, and deliveries don't always arrive in expiry order, so FEFO prevents avoidable expiry.

### Is FEFO used in agrovets and cosmetics shops?

Yes. Veterinary drugs, vaccines, pesticides and many cosmetics have expiry dates, so FEFO applies there too.

### Does FEFO affect how I value stock in my accounts?

No. Stock rotation (FEFO) and stock valuation (FIFO or average cost) are separate choices.