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Recording your Cost of Goods Sold (COGS) is easy in QuickBooks Online (QBO), and I'm here to show you how, @megahworldresour.
When you're using the trial version of QBO Plus, it has a built-in Inventory feature where you can easily manage your inventory. Through it, you can track and calculate your COGS accordingly.
Generally, once you set up your first inventory item in your lists, the system automatically creates the Inventory Asset (Other Current Asset) and Cost of Goods Sold accounts. Then, COGS is affected only when you sell your items.
You can start by turning on the inventory tracking feature. Here's how:
- Go to the Gear icon.
- Select Account and settings.
- Choose the Sales menu.
- Click anywhere in the Products and services section to open its details.
- Turn on Show Product/Service column on sales forms.
- Turn on both Track quantity and price/rate and Track inventory quantity on hand.
- Select Save.
I've attached a screenshot below that shows the last five steps.
Once done, you can add your inventory products and then keep track of what you sell. To learn more about this and for the step-by-step guide, you can refer to this article: Set up and track your inventory in QuickBooks Online. It also includes details about restocking and using reports to check the status of your inventory.
Also, here's an article that'll further guide you in managing and calculating your account's profits and loss: Understand how money flows through your business. It defines COGS and what's included in it, to name a few.
If you have other concerns about COGS, feel free to let me know in the comments below. I'd be happy to help. Have a great day, and be safe always.
