---
title: "Lot traceability"
description: "What lot traceability is, backward and forward tracing, FEFO picking by expiry date, and how lot and serial tracking make a product recall fast and precise."
canonical: https://ledgeriano.com/glossary/lot-traceability
language: en
publisher: "Ledgeriano"
updated: 2026-11-06
---

# Lot traceability

> What lot traceability is, backward and forward tracing, FEFO picking by expiry date, and how lot and serial tracking make a product recall fast and precise.

Lot traceability is the ability to follow a specific batch of goods backward to the material lots and suppliers it came from, and forward to the production orders, finished lots and customers that received it. It turns a product recall from 'everything made in March' into a precise list of affected batches and customers.

Every receipt of a tracked item gets a lot number, often with a production and expiry date. Every issue, production order and delivery records which lots it used. Backward tracing answers 'what went into this finished lot?'; forward tracing answers 'where did this raw material lot end up?'.

Expiry dates add a picking rule. FEFO, first expired first out, issues the lot that expires soonest, and deliveries skip expired lots. For items that are not interchangeable, such as machines with serial numbers, specific identification under IAS 2 assigns each unit its own cost.

In [Ledgeriano](https://ledgeriano.com/guides/inventory-cost-accounting) lot or serial tracking is set per item, with expiry dates from a shelf life, FEFO allocation, lot balances, an expiring-lots report, backward and forward traceability through production orders to customers, and serial history.

## Example: a supplier warns about one flour lot

A bakery's supplier reports a problem with flour lot F-2611. Backward data shows the lot was received on 2 November; forward tracing shows it went into production orders 318 and 321, which produced bread lots B-1104 and B-1105, delivered to four wholesale customers. The bakery contacts those four customers only, instead of recalling a whole month's output.

### What is the difference between a lot number and a serial number?

A lot number identifies a batch of identical units made or received together. A serial number identifies one individual unit.

### Does FEFO change inventory valuation?

No. FEFO decides which physical lot is picked. The cost of the issue still follows the item's costing method, unless the item uses specific identification.

Guide: https://ledgeriano.com/guides/inventory-cost-accounting