Question

Can we enter our total cost by product for reporting in Cost of Goods Sold on P

Forum|Forum|4 years ago
March 24, 2022
5 replies
29 views

We are having issues understanding how the cost of goods sold arrives at the cost in the P

QuickBooks Online

Level 9

Hi there, @gngrbrmn.

Thanks for asking us today. The total cost of sales for a product with inventory type is calculated by adding all costs together. Also, the report will be based on the amount entered on the expense transaction.

You can also read these articles for more information about inventory tracking in QuickBooks Online:

Feel free to come by and post some more of your concerns if you have any. I'll be right up to help you again. Take care.

G

gngrbrmnAuthor

Thanks so much for responding! I'm still having trouble understanding how it is arriving at the amount for each finished product we sell in cost of goods sold. We sell roughly 20-25 products that we build in our warehouse from multiple parts we buy from various vendors - some finished products are made up of over 15 different parts we purchase from various vendors. Quickbooks does not know which parts we buy go into which completed product we then sell. Is there not a spot under products for us to list our actual cost to build that finished product we will then sell? I've attached a screen shot of what we see in the detail of cost of goods sold under the p&l accrual method. Many products even show zero which we know is not correct and the cost for the products it does show a price for is not correct.

C

CharleneMaeF

QuickBooks Team

Thanks for updating us on this, gngrbrmn. I know it can be difficult when the COGs show incorrectly. I'm here to share some insights.

Unlike QuickBooks Desktop, QuickBooks Online doesn't offer a Manufacturing feature. It doesn't allow you to combine items to make something else. This is the reason the COGs are incorrect on the Profit and Loss.

Since you can only track your finished products as inventory items, you can create a cash-type bank account called WIP (Work in Progress). Then, create a vendor called in-house.

In real life, make your finished product. Please note how many items were used and made. In QuickBooks, you can perform these steps:

Use inventory adjusts, then set the adjusting account to the WIP bank account and lower the qty of all items used.
If outside processing costs are also paid, use this WIP bank as the expense (reason) for the payment.
Bring up an expense transaction, select the in-house vendor.
In the item details part, select the finished item. Then, enter the qty made. Put the total amount that is in the WIP bank account.
On the account details part, select the WIP account. Then, enter that same amount as a negative number.
Save the zero-dollar transaction.

The inventory has been relieved, the costs accumulated in the WIP account, and finally, that total cost paid for the finished inventory item and stocked it with qty and item cost. The WIP bank is zero until you need it again.

To learn more tips in managing your inventory, you can visit our Inventory and projects page.

You can also check out this article to learn more about COGs: How to calculate and record COGS.

To check if QuickBooks Desktop is the right one for your business, please see this article: Track the Products you Manufacture.

If you're interested in moving to QuickBooks Desktop, you can check out our Plans and Pricing page.

Also, let us know how did you track your manufactured items in QuickBooks. This way, we'll be able to further investigate this.

I'm only a few clicks away if you need assistance managing your sales items. It's always my pleasure to help you out again.

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