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G
GNTL
November 16, 2020
Question

Pre-Posting COGS

  • November 16, 2020
  • 1 reply
  • 0 views

Good Evening,

 

I own a grocery distribution business and My Quickbooks program is set up for Accrual-Basis accounting such that I can gauge sales patterns while receivables are still 20-30 days away from being collected. 

 

When I generate a sales invoice - the SALE is off set by an ACCOUNTS RECEIVABLE posting. 

That A/R posting automatically posts to three other accounts

1) Sales (Income)

2) COGS (Using a projected average cost through the "item module"

3) Net Profit (The difference between #1 and #2.

 

 

As I input bills are varying cost levels/bases, how will my COGS reflect the ACTUAL COGS as per the varying costs in my posted BILLS instead of the projected average COGS put into the item module? 

1 reply

L
LauraAB
November 16, 2020

Hello GNTL,

 

It's awesome that you have your own grocery distribution business! Based on what you've described here, I can see how important tracking COGS and other details are for projections with your business. It's great that you've already got things set up for accrual-based accounting, since that counts for amounts not yet received or spent. I'd be happy to go over how inventory costing working in QuickBooks Online as well so you can get a sense of how you can review your data.

 

Since you have varying amounts for your the bills for the items, it sounds like QuickBooks Online's inventory setup may work well for you since it operates based on First In, First Out (FIFO) costing. This means that the program will base reporting on the first items entered into the system being the first sold by your business. This article goes into more detail: What is FIFO and how is it used for inventory cost accounting?

 

That being said, the reporting in QuickBooks Online should use the values based on how the item is configured in the program, not an average. Whether you're looking at the transaction journal for the invoice (accessed by clicking More at the bottom of a saved invoice), a report, or the COGS account directly through the Accounting tab, it should have the amount of the cost of the item.

 

In light of that, I think it'll help to have someone go over what you're seeing in your account to make sure everyone is on the same page with what's going on and where you're looking that you're seeing an average. Here's an article that highlights how inventory tracking works if you'd like to review that first: Set up and track your inventory in QuickBooks Online

 

To work with someone from our support team, who can use tools like screen shares and the exchange of screenshots to get on the same page as you, reach out using one of the following options.

 

Schedule a Callback or start a Chat: click (?)Help in the upper right > type and enter "Contact support" into the QB Assistant > click Contact Us > explain your situation > click Let's Talk > choose Get a callback or Start a Chat. Support is available from Monday to Friday between 9 a.m. and 8 p.m. ET.

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