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C
C__H
June 3, 2024
Question

How to account for an annual COGS Bill which I invoice for monthly?

  • June 3, 2024
  • 1 reply
  • 0 views
We purchased an annual savings plan from a supplier. We still receive a small additional bill each month as the cost is variable.  We invoice the client a set monthly fee. How do I account for this in Stock? I entered the Savings Plan as Qty 12, and the additional bill is entered as 1 per month so Stock shows as 2 items rather than 1.

I created an additional Product called Savings Plan and entered the annual Bill there, so the main product would remain correct, but how to I account for the prepaid monthly expense?  Should I keep the annual plan out of stock and raise a monthly journal to reallocate the expense, or will that cause an issue with my stock valuation as QBO Stock can be a little inflexible at times?

1 reply

JoesemM
JoesemM
June 3, 2024

I'll guide you on how to reallocate your expenses in QuickBooks, C__H.

 

In QuickBooks Online, you can create non-stock or service item to relocate your expenses aside from JE. This helps you keep track of all the stocks you buy and sell in QuickBooks.

 

Here's how:

 

  1. Go to Sales and select Products & services (Take me there).
  2. Select New and choose Non-stock or Service.
  3. Enter a Name for the product or service and an SKU, if you track them.
  4. From the Category ▼ dropdown, select the category that best describes your product or service. Find out more about item categories.
  5. Click the I sell this product/service to my customer's checkbox. If you don't sell the item, you can leave it unchecked.
  6. In the Description on sales forms field, enter a description.
  7. Enter an amount in the Sales price/rate field.
  8. Choose the account you want to use to track the sale from the Income account ▼ dropdown.
  9. If you need to track VAT, select the appropriate VAT from the VAT ▼ dropdown. 
  10. Select Save and Close.

 

Once done, you can add the product and service to your invoices, sales receipts, expenses, and other sales forms. You can also track it on your financial reports. For more details, open this article: Add product and service items to QuickBooks Online.

 

Upon sharing the steps above, I'd still suggest contacting your accountant. They can guide you through the process to ensure your books are accurate. 

 

Here are some useful articles you can explore to learn more about managing your sales items:

 

 

I'm always here anytime you need additional help concerning sales items and accounts. The Community will be on the lookout for your response.

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