Featuring Jennifer Flynn, VP of CPA Partnerships at Source Advisors
When most business owners think about tax-saving strategies, they often overlook one that’s been on the books since 1939: LIFO, or Last-In, First-Out. On the latest episode of The Cg Business Advisor, we sat down with Jennifer Flynn, a veteran in tax consulting and VP of CPA Partnerships at Source Advisors, to uncover why LIFO might just be one of the most powerful (and underutilized) tools in inventory accounting.
From Fiber Optics to Finance
Jennifer’s journey into the world of tax strategy is anything but typical. With an engineering degree from Rutgers and an early career designing fiber optic networks, she pivoted into valuation and cost segregation, cutting her teeth on power plants—yes, actual power plants. That foundation in technical detail and financial modeling eventually led her to Source Advisors, where she now leads national CPA firm initiatives and heads a sales team focused on driving real results for businesses.
What Is LIFO and Why Should You Care?
LIFO stands for Last-In, First-Out. It’s an inventory accounting method where the most recently acquired items (often the most expensive due to inflation) are recorded as sold first. The result? Older, lower-cost inventory remains on the books, reducing taxable income and ultimately lowering a company’s tax liability.
“It’s an oldie but a goodie,” Jennifer says. “It essentially defers income and gives you an interest-free loan from the government.”
The Case for LIFO in a Volatile Economy
With tariffs, inflation, and supply chain volatility continuing to affect costs, LIFO is having a resurgence. When raw materials, components, or finished goods spike in price, LIFO helps businesses shield themselves from the full brunt of that inflation—at least when it comes to tax
season.
Industries seeing major benefits in 2024 include:
- Aerospace & aviation parts
- Coffee production HVAC systems
- Electronic components & wiring
- Machinery and motors
Jennifer notes, “We’re tracking inflation across industries every month through the Producer Price Index. Right now, we’re seeing 3–6% inflation across many verticals, and even higher in some cases.”
LIFO vs. FIFO: Choosing the Right Fit
Many businesses default to FIFO (First-In, First-Out) because it offers a clearer financial picture and aligns with traditional financial reporting—especially for publicly traded companies. But when the goal is tax savings during inflationary periods, LIFO can be a game-changer.
Method | Best For: | Main Benefit: |
LIFO | Inflationary environments, private companies | Lower tax liability |
FIFO | Stable or deflationary markets, public companies | Accurate financials, transparency |
Real-World Impact: LIFO Case Studies
Jennifer shared several compelling success stories:
- A $25M inventory aerospace firm saw a $295K after-tax benefit just from switching to LIFO in 2024.
- An electronics manufacturer with $45M in inventory and 6% inflation saved over $1M in taxes.
- Even a small coffee company, with 15% inventory inflation, saved $150K through LIFO election.
“These are not one-time savings,” she emphasizes. “This is layered year-over-year benefit. It becomes a rolling reserve of untaxed inflation.”
Want to Know If LIFO Is Right for You?
The good news? Source Advisors offers free estimates to help you determine if your business can benefit from LIFO. Jennifer recommends business owners and CPAs alike take advantage of that insight.
“Just shoot me an email,” she says. “We’ll run the numbers and help you decide if this is a good fit for your unique situation.”
Connect with Jennifer Flynn & Source Advisors:
Listen to this episode and other Cg Business Advisor episodes here: cgbusinessadvisor.com© 2025