Cost of Goods

Thank you for providing on-point details about your concern, @refindary. I'm here to ensure you're able to fix the incorrect COGS amount on the Profit and Loss (P&L) report. 

You're on the right track in reviewing the correct accounts associated with each of your inventory items. Based on your scenario, it looks like you have set them up in QBO correctly. For more details, check out this article: Set Up and Track Your Stock. 

Here are the possible reasons the COGS is only showing $9.88 on the P&L report: 

• The accounting method is not appropriate. 
• Incorrect date range. 

To help fix this, let's make sure the Report period and Accounting method used in the report are correct. This way, you'll be able to view the income from the sale of your inventory item. I'll guide you how. 

1. Go to Reports from the left menu. 
2. Select the Profit and Loss report. 
3. Set the correct Report period. 
4. Choose the appropriate Accounting method. 
5. Click Run report.

The screenshot below shows you the last three steps. 

However, if your company operates on a cash basis, I'd suggest changing the accounting method to Accrual. This way, the gross profit amount will be accurate. This is one of the specific impacts of stock tracking on your P&L report. For more information, see the Impacts on profit & loss report section through this article: Impacts Of Stock Tracking On Profit and Loss Reports. 

Moreover, I recommend running any inventory reports in the software. These will help you view your best sellers, what’s on hand, the cost of goods sold, and the stock statuses. To learn more about this process, go through this article: Use Reports To See Your Sales And Stock Status. 

I'm just a comment away if you need anything else. Wishing you and your business continued success while using QBO, @refindary.

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@RaymondJayO wrote:

Thank you for providing on-point details about your concern, @refindary. I'm here to ensure you're able to fix the incorrect COGS amount on the Profit and Loss (P&L) report. 

 

You're on the right track in reviewing the correct accounts associated with each of your inventory items. Based on your scenario, it looks like you have set them up in QBO correctly. For more details, check out this article: Set Up and Track Your Stock. 

 

Here are the possible reasons the COGS is only showing $9.88 on the P&L report: 

• The accounting method is not appropriate. 
• Incorrect date range. 

 

To help fix this, let's make sure the Report period and Accounting method used in the report are correct. This way, you'll be able to view the income from the sale of your inventory item. Then, the gross profit will be accurate. I'll guide you how. 

1. Go to Reports from the left menu. 
2. Select the Profit and Loss report. 
3. Set the correct Report period. 
4. Choose the appropriate Accounting method. 
5. Click Run report.

 

The screenshot below shows you the last three steps. 

 

Also, stock tracking has specific impacts on your P&L report. One of these is the Gross Profit line will show the difference between your Total Income and Total COGS amounts. For more information, visit this article: Impacts Of Stock Tracking On Profit and Loss Reports. 

 

Moreover, I recommend running any inventory reports in the software. These will help you view your best sellers, what’s on hand, the cost of goods sold, and the stock statuses. To learn more about this process, go through this article: Use Reports To See Your Sales And Stock Status. 

 

I'm just a comment away if you need anything else. Wishing you and your business continued success while using QBO, @refindary.

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Thank you for your response. I have tried the suggestions and verified the date range is correct and Cash as our Accounting method. I am still seeing the $9.88 on the P&L for COGS.  Interestingly, I am not seeing the Inventory Asset account on my Balance Sheet, which it should be there because we added inventory. 

Still stumped.

Thanks for getting back to us, @refindary.

Let me provide additional details about the COGS amount in the Profit and Loss report and help you from there.

As mentioned by my colleague RaymondJayO, using the Cash basis for the accounting method of a report may show the incorrect gross amount. It's the possible reason That's why we suggest changing it to Accrual basis since this includes income and expenses even if the money hasn’t changed hands yet.

On the other hand, you can consider reviewing the account associated with the Inventory asset account so you can check it on your Balance Sheet report. Here's how:

1. Click the Gear icon, then select Products and Services.
2. Locate each inventory item and click Edit under the Action column.
3. In the Inventory asset account, review the account associated with it.
4. Click Save and close once done.

Then, go back to your Balance Sheet report and check the account from there.

Here are some articles you can read for more details: 

• Impacts of stock tracking on balance sheet and profit & loss reports.
• Change your accounting method.

Keep in touch if you need any more assistance with this, or there's something else I can do for you. I've got your back. Have a good day.