How do I track cost of good sold?

Introduction

When you or our systems creates invoices or sales receipts, the inventory asset accounts is credited and the cost of goods sold account is debited

Cloud Cart Connector Import New Products

Almost none of our integrations send us a product purchase cost. As a result, our software enters $0 as the purchase cost. Therefore, the journal entry described above will not happen with products that we create. The only exceptions are Magento and nopCommerce users. There are two ways around this

Import Product List

You can import a list of products to QB:

  1. In QuickBooks, click the gear on the top right.
  2. Click import data > products and services.
  3. Download the same spreadsheet.
  4. As you add items, ensure that the purchase cost is completed.
  5. Follow the on-screen instructions.

Change the Purchase Cost for Existing Products

You can export your product list, enter the purchase costs, and reimport it.

  1. In QuickBooks, click the gear on the top right. 
  2. Click products and services.
  3. On the right, click the button to export to Excel.
  4. Edit the purchase cost of the items.
  5. Click the gear on the top right of QuickBooks.
  6. Click import data > products and services.
  7. Follow the on-screen instructions.
  8. On the last screen, check the box overwrite all values.
  9. Once this is changed, you can rerun the existing orders to correct the journal entries.

Creating New Products Manually

Start by setting up inventory part items:

Go to Lists > Item List

Click the Item button, select New, and select Inventory Part.

On this screen, setup these accounts:

  • Cost of Goods Sold
  • Income
  • Inventory Asset

When you create a purchase order and receive inventory with a bill and payment, QuickBooks will debit the inventory asset account.

When you create invoices or sales receipts, your general ledger will change:

  1. Credit Sales of Product Income
  2. Debit Cost of Goods Sold
  3. Credit Inventory Asset

If the inventory asset and COGS accounts fail to change, ensure that there is a one to one mapping between your product SKU and the QuickBooks name.

Here is an example item:

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