What is the proper way to invoice for non inventory items and have COGS show up on reports?
We sell items that are services which have a fixed cost. There are many items. I'd like to use the cost of goods sold block in the item set up to enter the cost. That way, when an item is posted to an invoice, a corresponding cost of goods sold is entered at the same time with the correct date for accrual purposes.
But what do I do when I get the bill from the vendor? I enter the bill into accounts payable, but what is the account I should debit? I wouldn't use cost of goods sold again because it was already entered on the sale of the item.
If I could find out what account QBO credits when it debits COGS on the sale of the item, then I could debit that same account when I enter the bill. Any help would be appreciated.