How to calculate and record cost of goods sold | Run your business

Learn more about the cost of good sold: intuit.me/2Vk4isU
It is essential to calculate the cost of goods sold (COGS) when you are a product-based small business. In this video, Astrid Daniela Galvez (QuickBooks ProAdvisor and Tax Specialist) shows you how to calculate and utilize COGS to maximize your business profit.
00:00 - Introduction
01:17 - What is cost of goods sold (COGS)?
01:51 - Why is the cost of goods sold important?
02:51 - How to calculate the cost of goods sold
03:26 - How to use the cost of goods sold
04:45 - Using QuickBooks to calculate COGS
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[@SimpleIdeaz]

Still don't know how to use quick books to track.... Already know the importance

[@user-oe3yd3jl1m]

So how do you record COGS? This was just a basic definition of COGS

[@quickbooks]

Great question here! In QuickBooks when you create a sales transaction (Invoice or Sales Receipt) for a customer including inventory, then the customer pays, and the income is deposited, the transaction and inventory sold automatically hits your Cost of Goods Sold account in your Chart of Accounts, and adjusts the quantity on hand for those items that were sold. So once the sales transaction is completed, and you receive payment for it, the Cost of Goods Sold is automatically adjusted! For a detailed outline of how this works, you can visit the article that's paired with this video demonstration right here: (quickbooks.intuit.com/r/bookkeeping/cost-of-goods-sold/)! ^Faith

[@aamirincrediblegamer6630]

You should have shown demo in QBO

[@snothilengema3900]

Hi, thank you for the video, How do I link sales to the inventory so that every time I make a sale Quickbooks automatically reduces inventory. How do I record the cost of sales? thank you

[@quickbooks]

Hello, Snothile! As long as you have inventory tracking enabled within your QuickBooks Online or QuickBooks Desktop account, QuickBooks will automatically account for the adjustments to your Cost Of Goods Sold, and Quantity On Hand for each Inventory Item that's sold once the sales transaction is processed and paid by the customer. For a detailed work-flow of how this works in QuickBooks Online, you can visit: quickbooks.intuit.com/learn-support/en-us/set-up-inventory-lists/set-up-and-track-your-inventory/00/186430 Or: quickbooks.intuit.com/learn-support/en-us/other-questions/quickbooks-pro-2021-inventory-items-set-up/00/696387 for QuickBooks Desktop! -Faith

[@sallc2007]

@@quickbooks If you setup the item as an inventory item (not a service item or non inventory item) then when you sell it, it will reduce inventory and record Cost of Goods Sold. Remember also to use this item on the bill you get from your vendor and not use the Inventory Account as the "category" on the bill.

[@rosebouba2449]

Simple and clear.

[@ParkerTalksStocks]

I'm having trouble inputting my COGs into my Commerce products to accurately see my profits.

[@mpavadiaz1]

how do you actually record these in quickbooks?

[@quickbooks]

Hey there. I have an article with some additional information to the video as to how to calculate cost of goods. Here;s the link: quickbooks.intuit.com/r/bookkeeping/cost-of-goods-sold/. All the best. -Kyle

[@mpavadiaz1]

I understand the calculation. I don't understand how to enter this appropriately into quickbooks. I believe this is what most want to understand. @@quickbooks

[@hamzaarif6000]

We already know this. You should show us a demo instead 😒

[@edmonddantes1618]

Garbage. All talk no action. Why even sit in front of a lsptop when you don't cover any material on it?