Let's figure out why the cost of your product isn't being subtracted from the selling price when you send an invoice, @bigboyroodepoort.
To confirm, are you looking at your Profit and Loss report? If so, please know that the Cost of Goods Sold (COGS) in your P&L will only be affected once you've sold an Inventory item on invoices or sales receipts.
In QuickBooks Online (QBO), it's essential to recognize how invoicing handles the relationship between the cost of products and their selling prices.
When creating invoices, QBO calculates the total based solely on the selling price, meaning the cost is not automatically deducted from this total. Instead, the system maintains separate records for sales and costs. If they're managing inventory, the realized cost associated with sold products is reflected in the Cost of Goods Sold (COGS) account when they record sales transactions.
Understanding this separation is vital for assessing your overall profitability, as the invoice will only show what the customer owes, while the COGS account will provide insight into the expenses incurred for the goods that were sold.
Similarly, if they're dealing with non-inventory products, the cost is immediately realized at the time of purchase rather than during the sale. This means that the expense is recorded when they acquire the items, impacting their financial reports right away.
Additionally, you can check out these articles to learn how to track and adjust your stock:
Feel free to come back to this conversation if you have any other issues related to the COGS or if you need further assistance. Take care.
