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TWAE
TWAE
January 11, 2023
Solved

Milage as COGS

  • January 11, 2023
  • 1 reply
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Once of my business does importing. Typically I have the items delivered to my location as part of a turn-key shipping solution with all the fees rolled into one invoice, which I charge to the customer at a flat-markup.

 

But sometimes one of us has to go to the airport and pick the products up. In this situation I charge the customer an airport pickup fee, milage, and whatever misc. fees the airlines tack on to get the shipment out of their warehouse.

 

For milage and other expenses that I'm going to be directly billing to the customer, should those be tracked as a COGS or as a regular expense? For instance should I have a "Milage COGS" account or just a single milage account for all my milage?

Best answer by Rustler

At tax time, COGS is the cost of the items you stock and sell.

 

The cost of customer ordered items that are not stocked as inventory items, is not COGS.  It should be posted to a COGS type account called COS, Cost of Sales that  you can create in teh chart of accounts.

 

Mileage is a tax time deduction which when taken means you are not also taking vehicle depreciation, repair or maintenance expenses, or fuel, etc etc.  You can however charge the customer for the trip, that is income you receive.  Any costs by the airport or broker to get the items is part of the cost of the items ordered

1 reply

Rustler
RustlerAnswer
January 12, 2023

At tax time, COGS is the cost of the items you stock and sell.

 

The cost of customer ordered items that are not stocked as inventory items, is not COGS.  It should be posted to a COGS type account called COS, Cost of Sales that  you can create in teh chart of accounts.

 

Mileage is a tax time deduction which when taken means you are not also taking vehicle depreciation, repair or maintenance expenses, or fuel, etc etc.  You can however charge the customer for the trip, that is income you receive.  Any costs by the airport or broker to get the items is part of the cost of the items ordered

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