Industry trends Organization: A manufacturer that imports and processes goods for construction. Need: Cost savings to combat increased inventory costs due to tariffs and inflation. Outcome: $200,000 in savings by switching to the LIFO accounting method. Understanding the situation A manufacturer specializing in importing and processing goods for the construction industry was being hit hard by increased inventory costs due to tariffs and inflation. To maintain its profit margins and staffing levels, the company reached out to its longtime tax and accounting advisor, CLA, to explore cost saving opportunities. Explore if the LIFO accounting method could cut your taxes. As an inventory-heavy company, the CLA team thought the LIFO (last-in, first-out) accounting method could be a good cost-saving option. LIFO allows companies to reduce taxable income by deducting higher recent inventory costs against current revenues. Modeling was conducted because the company had some inventory on LIFO and some on FIFO (first-in, first-out). CLA determined moving to a 100% LIFO-based model in 2025 could yield tax benefits ranging from 2–5 times higher compared to a normal tax year. We appreciate the many ways CLA proactively helps us improve the financial health of our business over the years. — CFO, manufacturing company Achieving results Switching to LIFO cut the company’s taxable income by about $1 million, producing $200,000 in tax savings. Contact us Explore if the LIFO accounting method could cut your taxes. Complete the form below to connect with CLA. MORE FROM THE CLA FAMILY © 2026 CliftonLarsonAllen. All rights reserved. "CliftonLarsonAllen" and "CLA" refer to CliftonLarsonAllen LLP. Securities and investment advisory services are offered through CliftonLarsonAllen Wealth Advisors, LLC, an SEC-registered investment advisor, member FINRA/SIPC. CliftonLarsonAllen is a Minnesota LLP, with more than 120 locations across the United States. The Minnesota certificate number is 00963. The California license number is 7083. The Maryland permit number is 39235. The New York permit number is 64508. The North Carolina certificate number is 26858. If you have questions regarding individual license information, please contact Elizabeth Spencer . CLA (CliftonLarsonAllen LLP), an independent legal entity, is a network member of CLA Global , an international organization of independent accounting and advisory firms. Each CLA Global network firm is a member of CLA Global Limited, a UK private company limited by guarantee. CLA Global Limited does not practice accountancy or provide any services to clients. CLA (CliftonLarsonAllen LLP) is not an agent of any other member of CLA Global Limited, cannot obligate any other member firm, and is liable only for its own acts or omissions and not those of any other member firm. Similarly, CLA Global Limited cannot act as an agent of any member firm and cannot obligate any member firm. The names “CLA Global” and/or “CliftonLarsonAllen,” and the associated logo, are used under license.