How to get QB to caluclate gross margin % correctly?

Hey there, sm5000. 

I'm happy to shed some light on the gross margin %. You can add it to other reports such as the P&L report, by clicking the drop-down arrow under Period to compare and checking the % of income box. As far as your reports including COGS, Gross Margin and Gross Margin %. You can customize the reports as follows. 

1. In the window, select the Filter ▼ icon.
2. Select the Distribution Account drop-down.
3. Select the boxes of the accounts you want to see on the report. You can select more than one.
4. When you're ready to apply the filters, select Run report.

You can find these steps in addition to many others at the following link: Customize reports in QuickBooks Online. 

If you have any other questions, feel free to post below. Thank you and have a nice afternoon. 

Hi Nick_M,

Thank  you for your response.

I have two income accounts: 1) Services & 2) Product Sales and I have respective COSS/COGS associated with them 1)COSS & 2) COGS sold. On a P&L it won’t automatically break out gross margin percentage based on each source of revenue (Services & Product Sales).

That is why the report Sales by Product & Service Summary is important to me. Please correct me if I am wrong if other reports display information like the above-mentioned summary report where I can see gross margin percentage for each category with ONLY ITS ASSOCIATED COGS.

In the Sales by Product & Service Summary page, I do not see a “distribution account” drop down when I go to customize>filter – I only see “customer,” “product/service,” “class,” “purchase order no.,” “project,” & “proposal no.” Either way, I am not sure how that is going to help. All of my products & services are showing up. Just no cogs, gm, gm% with them.

Thanks for getting back to this thread and performing the steps provided above, @sm5000.

Allow me to provide more information on why the COGS, Gross Margin, and Gross Margin % show blank in the Sales by Product & Service Summary report. 

Normally, COGS is only affected when you sell inventory items on invoices or sales receipts. This means that COGS, Gross Margin, and Gross Margin % columns will only show the data for transactions that have inventory items on them. This can be reason why it doesn't show in your Sales by Product & Service Summary report. 

For your second concern about the Distribution Account drop-down, this will only show in the Profit and Loss report that was mentioned above. This is the reason why you're unable see it the Sales by Product & Service Summary report.

For more information on how QuickBooks handles inventory assets, average cost and Cost of Goods Sold (COGS), you can check out this article: Understand inventory assets and cost of goods sold tracking.

Also, I've included an article oh how you can customize your reports in QuickBooks Online. This will help you in viewing the details that matter the most to your business. How to get the most out of your financial report. 

If you ever have other questions I can help you with, feel free to swing by the Community. I'll get back to you as soon as I can.

Thank you for your response and clarification. I created a fake invoice with an inventory item and sure enough, it did exactly what you mentioned. Is there any way to get QBO to do this with non-inventory items?

Is there another report I can use or can a create a custom report in some way to get something that looks like the "Sales by Product and Service Summary" with the actual gm% automatically calculated?

Thank you for your response, sm5000.

I can see that you really need this report for your non-inventory items. I got a workaround to get the gross margin for this type of items. We can run a quick report for each of them to see their total purchases and sales, and from there, we can calculate the gross margin.

First, you can pull up the Sales by Product & Service Summary report to get the list of items. Then, export it to Excel and filter the non-inventory items. After that, run a quick report for each non-inventory items like in the screenshot, calculate the gross margin, and enter the value in the report in Excel.

Please let me know if you have any questions as you try this. Happy weekend!

Hi, I was reading about this because I have the same issue with the Sales by Products and Services Summary. The COGS, Gross Margin and Gross Margin % show blank, but I checked about you suggested could be the reason of the issue, and this also happens even with the transactions with inventory items. I don't understand why similar items shows all the information and others with the same category and same blank filled, not.

I'll appreciate any help in advance :)

Thanks for joining this thread, @duniama233.

I also appreciate you for going through the steps suggested by my colleagues above. I can provide you some information on how we can generate the report to show the details you need for your business.

You’ll want to ensure you’ve entered the correct date in generating your Sales by Product and Service Summary report. Incorrect dates affect the accuracy of your report, which leads to producing wrong data.

If the dates are correct, I recommend contacting our Support team. They have the proper tools to securely look into your account and investigate the cause why the report is showing inaccurate data. Here’s how to reach out to them.

1. Go to the (?) Help menu in your QuickBooks Online (QBO) account.
2. Select the Search tab.
3. Click Contact Us.
4. Enter a brief discussion of your concern and click Continue.
5. Select either Chat with us (if you preferred messaging) or Give us a call.

You can also refer to this article for more details and ensure to review their Support hours to know when agents are available: QuickBooks Online Support.

Let me also add these articles that you can read to learn more about running reports and managing your inventories:

• Run reports in QuickBooks Online
• Understand inventory assets and cost of goods sold tracking

In case you need further assistance with your product and service report or with your account, you can always tag me in your reply. It’s always my pleasure to help you run your business seamlessly. Have a great week ahead!

I know I am joining late but I will offer my input anyway.

If I am not mistaken, I think the question is about getting QB to calculate Gross Margin by Client - at least my question would be about that.

 As was mentioned, the only place I can find that even mentions Gross Margin is Sales by Product & Service Summary.  

At the very top level, the Income Statement, you can click on % of Income in the Customize window to get your answer.  But if I want to know what my Gross Margin is by Client, I am stuck.  Right now I need to convert the Sales Report and the Income by Customer Report into Excel Spreadsheets.  After that, sort them alphabetically and hope the resulting lists are identical.  Where they are, I then divide, for each customer, the Income by Customer amount from that spreadsheet by the Sales for the same customer from the Sales Report to get the Gross Margin.

Anyone know of an easier way?

Clarification: Once you add the column "% of income" to the P&L, you can see Gross Profit = Gross Margin% and COGS% under % of income. If you change the "display columns by" month, then Run Report, you can track their performance (change in %).