How to enter the cost of goods sold in QuickBooks

How to enter the cost of goods sold in QuickBooks

Are you running a small or medium-sized business and want to get rid of the chaos of managing your financial accounts? Well, try out quick books and make your tasks easier. 

QuickBooks

A QuickBooks is a type of financial tool that helps people to manage their business accounts. For instance, inventory, payroll, invoicing, tax filling, income, and expenses, etc. It is not only easy to use but can also summarize every aspect of your business. Just try out QuickBooks services and get a real-time view of your cash flow. 

But before you go for QuickBooks, it is important to understand “what is the cost of goods sold?”

Cost of goods sold

The cost of goods sold generally defines to the goods cost or services produced by the company. If you know the cost of goods sold, you can easily calculate your business profits. Make sure not to get confused between the cost of goods sold and the cost of sales. Both are different terms and are calculated differently. 

The cost of goods includes material that you use to make your product or to provide the service to your clients and customers. Furthermore, it comprises labor and overhead expenses related to production. For example, electricity, rent of land, rent of assets, etc. 

It does not include any indirect expenses such as distribution or marketing. Also, cold of unsold goods and services are excluded from the cost of goods sold. 

How to calculate the cost of goods sold

The cost of goods sold can be calculated by adding the cost of inventory at the beginning of the reporting period, other inventory purchased for sale during the reporting period. Make sure to deduct the inventory cost outstanding at the culmination of the reporting period and also all the excluded items from the cost of goods sold. 

It will help you to calculate the value of your inventory and thus for calculating business assets and profits. 

Read more about: “How to Download QuickBooks Tool Hub

How to enter the cost of goods sold in QuickBooks

There are different types of methods that you can use to enter the cost of goods sold in QuickBooks. You can track the cost of goods sold more easily if you have income and expenses details in the inventory times. Otherwise, you can track the value of your inventory manually as well. Just create an account to track your inventory value by following the below-mentioned steps:

Step 1: Click on the gear option and then on Chart of Accounts

Step 2: Click on 5new tab

Step 3: Click on current assets by dropping down the Account type option.

Step 4: Select other current assets by dropping down the detail type option.

Step 5: Click on the save and close the tab.

Once you are done with creating an account to track your inventory value, go for creating an account to track your cost of goods sold. Here are the steps that you can follow:

Step 1: Click on the gear option and then on Chart of Accounts

Step 2: Click on the new tab

Step 3: Click on the cost of goods sold by dropping down the Account type option.

Step 4: Select the type of cost of goods sold by dropping down the detail type option.

Note: make sure to choose the closest type of cost of goods sold that matches the goods and services sold by your company.

Step 5: Click on the save and close the tab.

Following all these steps one by one will help you to enter the cost of goods sold in QuickBooks easily. It will, therefore, help you to keep a track of all the costs associated with the products sold and to calculate gross profits.

Summary

To track the inventory and the cost of goods sold without much hassle, QuickBooks is one of the best tools that you can go for without even thinking twice. It not only helps you to handle inventory assets, average cost, and cost of goods sold but your other financial accounts too. to summarize, it can be said that you can manage all your business accounts with QuickBooks. 

It saves lots of time, effort, and data from being lost. You can also convert your quicken data into QuickBooks if you want to. Though Quicken also helps in keeping track of various accounts yet it is good for families and individuals and not much suitable for business purposes. 

However, it is high time to stay up to date anytime, anywhere with real figures. Do not get confused when you have the option of recording all the data related to the cost of goods sold in QuickBooks. Just follow the above-mentioned steps carefully and you are done with it. Try out entering the data into QuickBooks once and enjoy the well-organized, summarized, and categorized data of cost of goods sold in no time.

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