If you are running a business that uses inventory items then sometimes while running Profit & Loss report you might get incorrectly calculated Cost of Goods Sold. Even after verifying the items list QuickBooks displays negative COGS or the COGS amount does not even show up in the reports. The following article is intended to guide QuickBooks users to fix incorrect COGS in QuickBooks Desktop. So if you are also wondering how to adjust COGS in QuickBooks or how to make corrections to the incorrect COGS balance then follow the complete article until the end for detailed instructions.
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Reasons QuickBooks POS Calculate Incorrect COGS
Following are the reasons that cause discrepancies in COGS amount calculated by QuickBooks Desktop Point of Sale:
- You have entered an incorrect value of the item received.
- Item in the inventory does not have a cost set up, and you have entered the cost of the item after it’s been sold.
- QuickBooks Desktop POS is fetching data from an incorrect COGS account.
- You have made adjustments in the COGS account those are not displaying in POS.
- Somehow the transactions recorded by POS got deleted from QuickBooks Desktop.
- You are selling your inventory items separately after purchasing them in bulk.
Solution to Adjust COGS in QuickBooks
Solution 1: Verify the Cost of Item Sold is Entered Correctly
- From under the Reports tab click Sales and then select item Summary.
- Click Modify and then select Revert.
- From the Item Name section sort the items.
- Now locate any items with $0.0 in the Ext Cost section.
- Note down the items that do not have any cost set up.
- From under the Inventory section, select Item List.
- Click Edit on each item and then first check the history of the item to know how many items have been sold without a cost.
- Calculate the total amount of the items sold without any cost.
- Now from QuickBooks Desktop Journal Entry section, create a new journal entry that credits the amount to the COGS account and debit it from the Inventory Assets.
- In case if there are no items found with $0.0 value then follow the next step to adjust incorrect COGS in QuickBooks.
Solution 2: Make Sure Correct Cost of Goods Sold Account is Set up Under Settings
- Open QuickBooks Point of Sale and from under the File tab click preferences and select Company.
- Click Financial and then select Accounts.
- Verify that the Correct COGS account is selected for each item listed.
- Now from under the Inventory section, click Item List.
- From the Column Header, choose Customize Columns and then check if the correct Cost of Goods Account is set under it.
- If you find an incorrect COGS account set up under the settings, then click the Item List and choose the correct COGS account for it.
- Open QuickBooks Desktop and make a Journal Entry to move the amount to the right COGS account.
Solution 3: Remove any Adjustments made with Errors in POS
- Open QuickBooks Point of Sale and from under the Inventory section select Quantity Adjustment History.
- Click Customize Column from the Column Header.
- Now add a Diff Cost in the column that is selected and then hit Save.
- Note down the quantity adjustments that were made by any mistakes from the Diff Cost section.
- To check the account where the funds are transferred double click an entry and then hit I want to view Financial History.
- Choose the option that says Open in QuickBooks and then click Inventory and select Cost Adjustment History.
- If you find any adjustment that was made by mistakes click I want to and then select Reverse Memo from Qty adjustment or Cost adjustment history.
- Now create a journal entry in QuickBooks Desktop to move the fund to the correct account.
Solution 4: Check for Deleted POS Transactions in QuickBooks Desktop
- Go to the Sales History section and click I want to.
- Choose Show Financial Details.
- If the Financial details show Sent to QuickBooks Successfully status, but you can’t see any Open in QuickBooks option, then it means that the entry has been deleted.
- In case you are unable to find the receipt in QuickBooks Desktop, then select Resend this document during the next Financial Exchange option.
- If any receipt is showing status as Not sent and Mark this document as successfully sent option is selected then un-check the Mark as sent check-box and click OK.
Solution 5: Check Items Received in Bulk are Not Sold Individually
- Click Items under the Inventory sections and check the items that you have purchased or entered in bulk like sand or bricks.
- Click the option Show Details and view the History of each item.
- If you get errors in the amount on your sales receipt, then create a journal entry in QuickBooks Desktop and enter the correct value of the item sold.
Following all the steps mentioned above you can quickly fix incorrect COGS in QuickBooks Desktop Point of Sale and in case QuickBooks POS is still calculating incorrect COGS then we suggest you get in touch with one of our QuickBooks POS experts at (844)-888-4666 for help and support.