Turn on suggestions
Auto-suggest helps you quickly narrow down your search results by suggesting possible matches as you type.
Showing results for
Connect with and learn from others in the QuickBooks Community.
Join nowI am starting my own business and have no clue what I'm doing in terms of accounting but am trying to figure it out. I make and sell custom wood products primarily tables, signs, butcher blocks and decorative boxes. I have no inventory and make everything after the order and payment is received. I do keep glue, screws, paint, stain and other supplies at the shop but the bulk of the expense is the wood which is purchased as each order is received. I understand that Cost of Goods Sold is determined via inventory but I don't keep inventory. I'm wondering how I track the cost of each item sold. For example: if I get an order for a table I would design the table with the customer, take payment and then go and purchase the wood needed as well as supplies (screws, glue, etc) that I'm low on. I'd then assemble the table and deliver it to the customer. If I understand right if I kept tables in inventory to sell the COGS would be the time/labor to design, build and deliver as well as cost of the wood and supplies and overhead for the time I was building. Because my items are not kept in inventory I wouldn't use COGS for tracking these expenses. Would I just track them as supplies/materials? Also how would I track items that are used for several products ie. glue, screws, stain, etc. Measuring and counting all of these things would take too much time to make sense financially. Thanks for any insight!
Solved! Go to Solution.
When you have cost but do not hold inventory like in your situation, open the chart of accounts and click new, select COGS and for detail type select Cost of Sales (COS). Then make the COGS account inactive.
Post all purchases for the order to COS
screws, glue, sandpaper, etc are an expense, use shop supplies expense when you purchase
Unless you are taxed as a corporation, your time/labor has no cost in business accounting.
When you have cost but do not hold inventory like in your situation, open the chart of accounts and click new, select COGS and for detail type select Cost of Sales (COS). Then make the COGS account inactive.
Post all purchases for the order to COS
screws, glue, sandpaper, etc are an expense, use shop supplies expense when you purchase
Unless you are taxed as a corporation, your time/labor has no cost in business accounting.
Hi Rustler,
I know this thread is a year ago but trying my chances. I am on the same boat. We do custom made wood projects. The only difference is, we are a taxed as a corporation. From what I understand, we do not have to keep an inventory and can use cash basis method (small business). So I can just do the same but I'm curious about time and labor. How do we record those?
Would appreciate your input! Thank you!
You have clicked a link to a site outside of the QuickBooks or ProFile Communities. By clicking "Continue", you will leave the community and be taken to that site instead.