I print signs. I buy bulk rolls of paper, sticker material. Don't want to calculate COG in every invoice. My few invoices show COG sold. How can I remove that cost?

With double entry accounting, you setup items that you purchase and sell and these items are used on purchase and sales forms such as vendor bills and customer invoices. Each item is setup with an "income" account and a "COGS" account so that when you purchase an item, QBO can automatically track the "cost" of that item on a FIFO basis (first in, first out). When you sell the items you purchase, QBO automatically records the "COGS" based on the FIFO cost of the item sold. If you don't want to track FIFO cost of goods sold for each sales item, you will need to remove the "cost" of the items you purchase and sell.

How can I remove the "COST" of each item I sale? Please can you tell me the process in steps?

Just repeating my initial question. I buy Banner material Roll once that is my one time expense. I don't want to include any COGS on each invoice or item sold.

Thanks

Good morning, 3dxtrusion-gmail.

Thanks for following up on this thread. I'd be glad to lend a hand to change COGS from showing on your invoices.

Whenever an invoice is created with an item you're selling that's mapped to the Cost of Goods Sold (COGS) account, you'll see them in the account register. This happens because when you sell an item, QuickBooks Online needs to record not only the sale, but the amount that item costs you, which in turn calculates your profit.

The tracking or mapping is recorded under the COGS account by default, but can be changed if you'd like. Here's how:

1. Hove over the Sales tab in the left navigation menu, then click Products and Services.

2. Locate any items you'd like to change this account for and choose Edit.

3. From here you can select a different Expense account.

Here are a few articles that I believe you'll find helpful:

• Set up and track your inventory in QuickBooks Online

• Impacts of inventory tracking on balance sheet and profit & loss reports

• What is FIFO and how is it used for inventory cost accounting?

I'm just a comment or post away if you have any other questions. Take care!

Thanks for helping. I am getting closer what I want. Still need assistance.

As I mentioned earlier, I don't want to record any invoice / Sale either under COGS or any Expense A/C, just want to record as simply Sale. Few invoices that I already created, sent and received payment, items sold under those invoices still shows as COGS, which appears as Account Receivable and reduces my actual Expenses in Accounts Overview. Is there any way that I can remove those items sold from COGS to SALE account? I did change those categories to SALES account but its not reflecting the already created invoices.

Please advice.

Thanks again.

@MorganB 

This is great information you've shared. One additional fact that is important to note is if "purchases" (expenses and vendor bills) do not use product/service items and they are "directly" categorized to a COGS (cost of goods sold) expense account AND there is a COGS account mapped to a product/service item with a "cost", the COGS will be "overstated" on the Profit and Loss Report. Many business owners record their COGS purchases "directly" to a COGS expense account and do not use "items" on purchase documents.

I'm happy to help. When you create a sales invoice the line items "stick" in the invoice and stay mapped to the accounts that were "originally" mapped to the item, even after you update the account mapping for the item. There is a box you can select to "also update this account in historical transactions". However, if you do not select this box, it will not update the historical transactions. You will need to edit each sales invoice by deleting the line items mapped to COGS accounts and then re-entering the items mapped to income accounts to remove the COGS expenses connected to each invoice. Also, be careful to only use income accounts for income mapping on sales items and to not enter the "purchasing" information when you setup your sales items if you don't want the sale of an item to record your COGS expenses.

@MorganB 

The COGS is NOT automatically mapped or tracked by default when items are used on sales forms. This only occurs if you enter a "purchase" cost for an item either "manually" or by creating a purchase document with the item which creates the "FIFO" cost of that item "automatically" in QBO. Also, COGS would not show up on an A/R report unless the user mistakenly mapped the "Income" from an Item sold to a COGS expense account. And only "Inventory" type items automatically have the COGS account setup under the purchase section of an item setup. You have to specify that you "purchase" an item if it is non-inventory and input a cost for QBO to automatically track COGS when you create a sales form.

With that said, it is a best practice to include the cost and sale price of "Inventory" type items and to automatically track COGS by using inventory items on purchase and sales forms accordingly. It is not however common to automatically track COGS for non-inventory items. Typically, you do not setup the purchase cost of non-inventory items but rather record those expenses when they "separately" occur.

This user is not trying to "change" the COGS expense account, they are trying to omit the recording of the COGS expenses for the items they have recorded on sales forms in which they mistakenly included either the incorrect account under "Income" or input a cost for purchasing the related items.