Cost of Goods Sold Help

caw7557 · ‎August 16, 2023

Hi All -

I'm needing some guidance for using QB's online to pass hardware expenses on to the customer and how to log this in my books. The scenario is I charge my clients for services such as installing IT equipment. I purchase this equipment with my business credit card and pass the cost onto the client without any markup and with the applicable state taxes applied from my original purchase.

Two Questions:

- When I log this, I've been logging it as an expense under the cost of goods sold category.

- When I invoice the client, I do not see a good option to qualify this expense. I only show Non-inventory Products and then Services. Neither really fit the description of what I need to do to recoup the expense.

If anyone has any ideas, please let me know.

Thanks!

Rustler · ‎August 17, 2023

Cost of Goods Sold, at income tax time, is the cost of the items you keep in inventory that are sold.

I would create and use an expense account called job expenses

To charge the customer for the expense you paid, either use a service type item you create that links to an income account, or use a double sided non inventory item also linked to an income account. I prefer the service type item.

On the P&L, income is reduced by expense to get taxable net profit.

caw7557 · ‎August 17, 2023

Hi Rustler - I appreciate the information and have added "Job Expense" to my Chart of Accounts.

Thank You!

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