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FreshStartOrganizing
Level 1

Subcontractors and Materials

When I use subcontractors or material specific to a customer, I record it as expense but cost it to the customer it was used for.  This allows me to run a P&L showing the net income per customer after the subcontractor and material costs.  With this method, are there any additional advantages or disadvantages to changing the subcontractors and material to a COGS account?  There is no inventory involved in the materials.

1 Comment 1
Teri
Level 9

Subcontractors and Materials

Pretend COGS=COS.  Cost of Sales vs. Cost of Goods Sold or equivalent to Direct Costs on P&L. 

QB has shown COGS for 30 years and so far you cannot change it, one of my many peaves on it.

The advantage is that you should be able to see Gross Profit (Revenue minus Direct Cost) before you deduct your Indirect expenses to get to Net Profit at the bottom of Income Statement, which QB calls Net Income, another peave for me. Revenue is also called Income on QB, just FYI there.

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