Cost of Goods Sold report |
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This report is accessed through the menus P.O.S. / Inventory Reports / Cost of Goods Sold.
Select the desired options in the dialog, then click the Generate Report button (if Auto-Generate is not enabled). You can then Print the report or use Export List to save it to a CSV file, or adjust the options to generate other reports. Whenever you have finished generating reports of a particular type, just Close the dialog. The last options you selected (except for the dates) will be saved for that report and used as the default the next time you open that report dialog.
Pre-requisites for Accurate Cost Accounting
Cost of Goods Sold is an important accounting report, and Campground Master has powerful features for tracking it -- however, as they say with computers, "garbage in, garbage out".
At the very minimum, you will need to have the On Hand Quantity field and the Cost field enabled for inventory items, and each item will need to have an accurate On Hand count in it. If you have a Cost value entered for each item that represents the average cost of each item, you can get approximate results using the default Cost Accounting method of "None" (set in Program Options / P.O.S.). However this is not likely to be sufficient for tax purposes, especially if you're not using the full inventory tracking functionality.
In order to use this effectively for tax purposes, a lot of things need to happen:
1. Select your Cost Accounting Method, in Maintenance / Program Options / P.O.S., so it knows how to calculate it. There are several popular methods, and Campground Master has implemented all of the common methods.
We won't define these in detail here, since your accounting person should already understand these in depth. Just know that these calculate the cost using information from sales, purchases and other Adjustments entered throughout the year. For most methods, the order of actions is important. For the order, Campground Master uses the Date (and in some cases, the Time) of the record, whether it's a sale Transaction, Purchase Order "received" date, or the date & time of the Adjustment entry.
•FIFO (First In, First Out) -- assumes the earliest purchased items are the first sold, using the "perpetual inventory system" method.
•LIFO (Last In, First Out) - assumes the last purchased items are sold first, using the "perpetual inventory system" method.
•Moving Average -- uses an average that is recalculated each time purchases are made. Also known as the AVCO Perpetual inventory system.
•Weighted Average -- calculates an overall average at the end of each accounting period. Also known as the AVCO Periodic inventory system.
There is also a "None" option, selected by default, which just uses the Cost from the inventory record and assumes no real-time tracking is done. This is not a valid accounting method, and is only used to make things faster for those who don't care to use the more advanced tracking and reporting functions. You can also get approximate results with this if you are not looking for perfect accounting results.
2. Initial inventory setup / starting point. Beginning Inventory must be known to calculate COGS. If you started out setting On Hand inventory properly which you first used Campground Master and have maintained this ever since using Purchases, etc, then you may be all set. Otherwise, you will likely need to enter retro-active adjustments to get to a good starting point.
3. Tracking Purchases. It will need to know when you purchased items, how many and at what cost. If you use the Purchase Orders functionality, and also use the Receiving function, then this will also do the tracking for you (once you've started using version 11 or later). Otherwise, you will need to Enter an Adjustment for each purchase to properly track it for cost accounting. It should go without saying that entering the accurate Cost of each purchase is also important.
4. Tracking Sales. As long as you're using the P.O.S. Sales Entry dialog for all merchandise sales, then this is being tracked for you. However if you enter a sale without using the P.O.S. (or use "Other Charge" to enter an item's charges instead of properly scanning or selecting it from inventory), then inventory will not be properly adjusted.
5. Tracking other Adjustments. To have a proper inventory count, it will need to know about any other changes to inventory on hand -- theft, removed for use, damage, etc. These should be entered as Adjustments whenever possible. The closer to the actual time of the event that you enter it, the better.
6. Final Inventory Count. -- For the absolute best accuracy, any business should be doing an inventory count at the end of the reporting period. If you do this, enter the results of the Count through Enter Adjustments so it can update the inventory and track that as a change in on-hand quantity.
IMPORTANT -- This and other inventory reports assume that the current On Hand quantity, based on the current quantity for the item in the Edit Inventory Item dialog, is correct. It then works backwards from that to "back out" sales, purchases, and other Adjustments each day. Therefore it's extremely important that the you maintain the on-hand quantity by entering adjustments (purchases, losses, inventory counts, etc) as they occur. See the section on Entering Inventory Adjustments for more details.
What this doesn't track
Campground Master does a good job of tracking the "cost" of items and quantities. What it won't do is more complex and detailed accounting for things like materials used to manufacture items for sale, etc., or other expenses involved in inventory management.
Report Values
This report has columns for the primary amounts needed for Cost accounting for tax purposes (assuming of course you've been using the system properly to track all inventory changes so that it has all of the necessary information). Except for Cost of Purchases, these values all use the appropriate calculations as described above for the selected Cost Accounting Method.
Beginning Cost -- Total cost of all inventory on hand for that item, class, or category, as of the beginning of the first day of the report range.
Cost of Purchases -- Total cost of all purchases during the reporting period.
Ending Cost -- Total cost of all inventory on hand for that item, class, or category, as of the end of the last day of the report range.
Total COGS -- Cost of Goods Sold, equals Beginning Cost + Purchases - Ending Cost.
Note that it's possible for COGS to have a negative value. This can happen for instance if the calculated value of current inventory is larger that what was paid for it, e.g. due to a large cost increase being applied to older inventory -- essentially a capital gain on inventory, which would show up as income when you subtract the negative amount on your taxes!
Report Options
The report has some common settings as you see throughout Campground Master:
From/To Dates -- You can select any start and end date for the report. There are also helper buttons to quickly select Qtr-to-Date, Year-to-Date, Last Qtr and Last Year date ranges. Note that if you accidentally try to report on future dates, the results will be zero or undefined. naturally you should set these properly for your accounting reporting period.
Auto-Generate -- By default, you must click the Generate Report before it will calculate a report and fill the grid, since some reports can take a significant time to generate. If you're reporting on a small date range or using a fast enough computer, you can select the auto-generate option so that the report is refreshed every time you change one of the options. This can be useful for experimenting with the controls to see how they affect the report before generating a report for a large date range.
Group Total for Each -- The results can be grouped by Inventory Item, Transaction Category, or Item Class.
Hide groups with zero totals -- This will prevent showing group rows or columns (but not date summaries) that have a zero value for Cost of Goods Sold. Note that this will also hide items that have starting and ending inventory, but if the start and end are the same then the total COGS will be zero, so they will be hidden.
Show Quantities -- Select this option to show various quantities that may help explain where the totals come from -- it will show the quantities for beginning & ending On Hand, as well as the number sold, purchased, and any Adjustments. (You can refer to the Adjustment reports to investigate those details).
Show ending Unit Cost -- Select this to see the ending calculated cost per unit for the period. Note that this will depend on the Cost Accounting Method selected (not the Cost value from Inventory Item details). It's primarily useful for Weighted Average reporting.
Show Item: Codes / Descriptions -- Select whether you show the Item Code or Item Descriptions, or both, in the first column. If neither is selected, it will use the Description. This only has an effect if grouping by Inventory Item.
Inventory Item Filtering -- This button will open the Inventory Filtering dialog and allow a variety of filtering options.
Note that the "Use filtering" box must be checked in order for the filtering to take effect -- this is checked automatically if you edit the filter, but you can easily toggle this option on and off to see how the filtering affects the report.
There's also an option to "Save filter" for next time, which can be checked when you set up a filter that you want to use as the default. If this is checked when you close the report, then the filter will be saved and re-used the next time you run the report (and "Use filtering" will be checked automatically.) If you make changes to the filter but this box isn't checked upon exit, then the changes won't be saved but the previous filter will still be loaded (but will no longer be used automatically -- just check "Use filtering" again to re-activate it next time).
Further Topics:
Entering Inventory Adjustments