Diagnosing cost of goods sold accounts in QuickBooks Online
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- čas přidán 6. 08. 2024
- In a previous video, I showed you how to diagnose the income section of the Profit & Loss report. Now, I'll show you how to diagnose the Cost of Goods Sold section.
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Everything you've covered has been something I've encountered over the years. We repaired trucks, so I have experience with Cost of Goods sold and some of our shop workers didn't actually do repairs (parts runners, etc) so they didn't fall under our Cost of Labor account.
Sounds like you have gained some very valuable experience.
Thanks so much.
You're welcome!
Hi Thanks for all your great videos! This is on a slightly different subject, but involves raw material purchases (COGS). So, when I create a product under 'Products and Services' (in QBO) I assume I put COGS for the expense account there. BUT.....after we purchase that raw material, etc. and the check clears the bank (and filters into QBO to be reviewed in the banking window before "Add") what the heck "Category" do I put there? If I put COGS it seems that would be double dipping so to speak. ? So, I sure need to know what I put there. I just don't want to mess up the P&L.
Also, when I go to adjust inventory to add more (raw materials, etc. we purchase to make our finished product OR pre-made products that we purchase and resell) I've kept the account as "Inventory Shrinkage" which I learned is a mistake because on the P&L the Inventory Shrinkage is WAY off. What account to chose then? I'm sure you only are to choose inventory shrinkage if there is theft, damage, etc, but assume that's not correct when adding more inventory! HELP! lol Thanks!
I also just requested to join your facebook group here: facebook.com/groups/5minutebookkeeping/
:)
If you enter a transaction in QBO (via Vendor Bill or Expense), then you would have to Match that transaction in the bank feed, you can't choose Add because it's already in QBO.
QBO is not robust enough to handle inventory in a manufacturing situation. The best you can do is to use the Inventory Adjustment but change the account to Cost of Goods Sold, assuming that the costs you want to adjust were originally recorded to COGS.
I have a tshirt business and I order blank shirts from a vendor (I usually order more than I need just in case for mess ups or last minute add ons). What would I categorize the purchases as? I had been putting it in the COGS account but now I am second guessing it.
You would record them to COGS to keep things simple. You could use Inventory but it would complicate things.
This video was very helpful, thank you. I am going to be opening up a virtual bookkeeping business with the intention of bundling my wholesale QuickBooks subscription (for the client) in with my services. My understanding is that because I am the end user, I will pay the sales tax on that (and therefore my LLC will not be engaging in retail, it will just be "services"). In this case, is the COS the whole amount I would charge the customer or do I divide it up between my actual service and the breakdown of everything else (ie. the subscription, any third party apps used to service these clients, etc.)? In your opinion, how might you record this? Thanks again
I record the software that we provide to clients to Cost of Sales.
@@5MinuteBookkeeping ok thank you! Do you happen to know if we as bookkeepers need to classify business as retail or wholesale if we use cost of sales or cost of goods sold?
@@hollyzech8500 Sorry, I don't know the answer to that.
where to start to look if I have a negative cost of good sold balance, my client is asking!
That's a great question. Negative COGS generally would indicate that the inventory balance may be overstated. There are many other factors that could be involved, including whether QB is being used to track inventory (and whether it's set up properly), or even sales being incorrectly recorded to COGS.
So I am trying to do my accounting for my interior design business. I charge my client a marked up price for fabric then I pay is at about 30% less. How do I mark that in quickbooks, I dont think I am doing it right. Right now I just did they paid me XXX as an invoice and recieve payment then I just mark as an expense marking both as cost of goods sold. Which I have a feeling I am not doing right
Sorry, I can't answer specifically since I don't fully understand your questions. Perhaps you'd like to join my Facebook Group and ask the question there? facebook.com/groups/5minutebookkeeping/
my client's cogs (an attorney) has a negative cogs on his P&L. I looked at the items set up on his client's invoices, and some services he charges his clients for are set up as cogs. shouldn't it be connected with an income account cause the item is going on the invoices?
I don't have experience with legal accounting, which is very different from regular accounting. However, it would seem to me that they would have billable expenses and should also track billable income.
For our construction company I have everything that clients have paid under accounts receivable. Wondering if I need to recategorize as COGS?
The amounts that your customers pay your construction company are income and are tracked via Accounts Receivable. You would record COGS for amounts paid for products sold or products used in the construction process.
@@5MinuteBookkeeping thank you!
@@5MinuteBookkeeping How do I record COGS related to labor? I have employees who spend part of their time working directly on construction jobs that we bill for. The hours aren't directly billable they just contribute to the overall cost of the job. How do I accomplish this? Do I have to do journal entries for this?
@@misteebrowning7481 If you're going to make labor allocations to COGS, you would need to use journal entries to record the allocations.