What is the proper way to invoice for non inventory items and have COGS show up on reports?

tlynch · ‎April 29, 2019

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.

HoneyLynn_G · ‎April 29, 2019

Welcome to the Community space, @tlynch.

I appreciate you providing details about your concern for today. I can help you properly account your transactions in QuickBooks Online.

You can assign a specific account on your service items. That way, you can easily track their posting account when creating transactions. Follow the steps below to edit the service item:

On the top menu, click the Gear icon.
Under Lists, choose Products and Services.
Look for the service item. Under the Action column, click Edit.
Go to its Income and Expense account fields and update the accounts. I'd recommend consulting an accountant for the account to choose.
Put a check mark on the Also update this account in historical transactions box if you wish to.
Click Save and Close.

Meanwhile, you can also run the Transaction Journal report to track the posting accounts of the invoice/bill transaction.

Open the invoice/bill transaction.
At the bottom, click More.
Choose Transaction Journal.

That should keep you going today, @tlynch. For additional reference, you can check the links below:

Keep me posted on how these steps work out for you. I'll be here to keep helping. Have a great day.

Topics

Training

Community

Resources

What is the proper way to invoice for non inventory items and have COGS show up on reports?

What is the proper way to invoice for non inventory items and have COGS show up on reports?

Need to get in touch?