Are you encountering issues due to incorrect cogs in QuickBooks? Well, this guide is going to be helpful in such a situation. Not only will you know what this error means, but also the reasons for its occurrence. Without further ado, let’s explore everything about this incorrect cogs issue in QuickBooks.
What Are Incorrect Cogs In QuickBooks?
Sometimes, you will see some false values while accounting the yearly sales of your goods on QuickBooks. These wrong item costs are also known as QuickBooks incorrect COGS (Cost of Goods Sold).
This issue in QuickBooks can create problems and difficulties for you when you start preparing the budget for the upcoming year. And the reason is simple, i.e. wrong COGS in QuickBooks Desktop. But have you ever thought why are you encountering this issue? To learn about it, all you need to do is to scroll down this blog post.
Why Do Incorrect COGS in QuickBooks Take Place?
There could be a variety of reasons for mismatched COGS (Cost of Goods Sold) amount in QuickBooks Desktop POS, such as:
- When the entered cost for the received items isn’t correct, there are chances you may face this issue.
- In a situation where you missed or forgot to configure the item cost and enter it after the sale, this problem can trigger.
- Some changes in the COGS account that don’t appear in QuickBooks POS can also lead to QB incorrect COGS mistakes.
- If you buy items in bulk and sell them one by one, then you might see incorrect QuickBooks Cogs too.
- Your QuickBooks Desktop POS might be pulling the data from the wrong COGS account.
- The QB Desktop POS transaction records were deleted accidentally.
How To Troubleshoot Incorrect COGS in QuickBooks Desktop?
Now, when you know what wrong COGS in QuickBooks are all about and why they occur, let’s see how to fix them.
Method 1: Verify The Cost of Input At The Time Of Sale
The first thing you should do while fixing incorrect QuickBooks COGS is to verify if you entered the correct cost of input at the time of sale. Here is how:
- Choose the Item Name column header and try matching it with the Ext Cost column. For instance, if any item shows zero cost or an incorrect amount, write the name of those items and move to the next step.
- Next, click on the Inventory option and go to Item List.
- Now, you have to pick out one item at a time and tap on the Edit option.
- Once done, go to the History report for checking the quantity of the sold item, and multiply it with the cost of an item.
- Lastly, locate QuickBooks Desktop and start creating a journal entry that credits COGS for its amount and debits the Inventory asset.
Didn’t find any item having a 0.00 dollar amount? Proceed to the next step.
Method 2: Check If You Configured The Correct COGS Account For Items & Preferences
Another way for getting rid of QuickBooks Desktop wrong COGS is by checking if the configuration of the COGS account for items and preferences is correct. Try the below-listed steps.
- First of all, navigate to the Item List and click on it.
- After that, select the correct COGS account for the item.
- In the end, create a new journal entry in QB Desktop for transferring the amount to the right COGS account.
Method 3: Remove The Changes Resulting To Error in COGS Amount
One more way for eradicating faulty COGS adjustments in QuickBooks is by removing the modifications that are causing it.
- To begin with, launch QuickBooks Desktop POS and check the incorrect adjustments that are not reflected on POS.
- Later on, go to Quantity Adjustment History after selecting the Inventory option.
- Next, you have to choose the Customize Columns option after right-clicking on any of the column headers.
- Under the column list, insert Diff cost and save the changes. Sametime, write the wrong amount from the Diff Cost column and incorrect quantity adjustments.
- Afterwards, verify the modified entry by double-clicking the entry and choosing I want to > View Financial History > Open in QuickBooks
Ques 1) What does COGS mean in QuickBooks?
COGS (Cost of Goods Sold) is the cost of producing an item or service sold by a company. Understanding this will allow you to calculate your profits.
Ques 2) How do I track cogs in QuickBooks?
You can track COGS and inventory in QuickBooks by using the following steps.
- In the left menu, select Product and Services under Sales.
- After that, tap Edit in the Action column for a service item.
- From the top of the edit window, hit on the Change type option.
- Inset all the required information for the initial quantity on hand and As of date under the Inventory option.
Ques 3) Why is my cost of goods sold negative in QuickBooks?
When you have the invoices with the items having a COGS account as their income account, you may see negative COGS in QuickBooks Desktop POS.
Summing it up:
Ultimately, this blog post will help you in troubleshooting incorrect Cogs in QuickBooks in a few clicks. You can verify the cost of input, change the COGS account, and remove the modifications that are not required. Are you still confused about how to fix incorrect QuickBooks COGS? Get in touch with our QuickBooks experts via call for technical assistance.