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babennweavin
December 13, 2022
Solved

Labor and COGS

  • December 13, 2022
  • 1 reply
  • 0 views

We are a service company. I have set up billable time with Timesheets. I can see the hourly costs of each employee on each project, but why doesn't this show up as COGS Labor in my P & L?

Best answer by Archie_B

Good day, babennweavin.

 

Allow me to share some information about the Cost of Goods Sold (COGS) in QuickBooks Online

 

The cost of creating a thing or service that a business sells is referred as the cost of goods sold (COGS). You can determine your company's earnings by knowing the cost of goods sold. COGS can help determine the appropriate price point for a good or service. 

 

That being said, it is normal to have labor costs in your COGS because it allows you to calculate the profit margin of each item or services provided for each project. This includes the employees' hourly cost or payroll expense. You can check out this link for more info: Cost of goods sold: How to calculate and record COGS.

 

I've also included some articles and reports in case you need more information about how the system works:

 

 

Please return to this thread if you still need assistance or have other concerns about COGS. I'd be happy to help. Have a wonderful day! 

1 reply

A
Archie_BAnswer
Level 6
December 14, 2022

Good day, babennweavin.

 

Allow me to share some information about the Cost of Goods Sold (COGS) in QuickBooks Online

 

The cost of creating a thing or service that a business sells is referred as the cost of goods sold (COGS). You can determine your company's earnings by knowing the cost of goods sold. COGS can help determine the appropriate price point for a good or service. 

 

That being said, it is normal to have labor costs in your COGS because it allows you to calculate the profit margin of each item or services provided for each project. This includes the employees' hourly cost or payroll expense. You can check out this link for more info: Cost of goods sold: How to calculate and record COGS.

 

I've also included some articles and reports in case you need more information about how the system works:

 

 

Please return to this thread if you still need assistance or have other concerns about COGS. I'd be happy to help. Have a wonderful day! 

    H
    heidi20
    October 29, 2024

    how do i get the cost of labor into the COGS (flow)?  i always have to do a journal entry.

     

    MsNorthPND1881
    MsNorthPND1881QuickBooks Team
    QuickBooks Team
    October 29, 2024

     I can guide you through the steps to get the cost of labor into the Cost of Goods Sold (COGS) in QuickBooks Online (QBO), Heidi.

     

    This is useful for your business when entering or editing a single day or event at a time, such as when entering a weekly timesheet. Here's how:

     

    1. Select + New, and then  Single time activity.
    2. Enter the date the activity occurred in the Date field.
    3. From the dropdown ▼, select the name of the employee or vendor.
    4. For every activity type, select an activity line and choose a customer from the dropdown ▼ if you wish to change the activity to the customer or monitor expenses related to them.

    Complete the following optional fields. If you don't see the fields, they are turned off. You can turn them on by going to your Account and settings.

     

    • Service: If you use the services to enter time, choose a service that represents the activity.
      • Class
      • Location

    6. Enter a description of the activity. Select the Billable checkbox if you want to bill the activity to the customer. Enter a rate per hour. Select Taxable if applicable. To turn on this option, go to Settings ⚙, then select Account and Settings, then the Time tab to turn on Allow time to be billable.

    7. Enter the number of hours and minutes worked in the Time field. Select the Enter Start and End Times checkbox to enter the work started, ended, and the amount of time taken for a Break. Click Save.

     

    Once you have completed the steps, generate an Invoice and then execute the Profit and Loss Report to analyze the Cost of Labor within the COGS.

     

    In addition, learn more about how QBO calculates COGS through this article: Cost of goods sold: How to calculate and record COGS.

     

    To learn more information about managing inventory and what reports are available in QuickBooks Online, check out the following articles:

     

     

    If you require further assistance or have additional questions regarding COGS, feel free to revisit this thread. I'm here to help. Wishing you a fantastic day!

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