The Average COGS feature
The Cost of Goods Sold feature in Ecominate allows users to make inventory value and cost of goods sold adjustments to their accounting system. This article describes how Ecominate calculates cost of goods sold over any date range and how to make cost of goods sold journal entry adjustments to Xero and QuickBooks. A previous article describes the differences between the accrual and cash methods of accounting for Amazon businesses. This article builds on that to allow you to begin making accrual based journal entries.
Assigning costs to products
The first step to calculating cost of goods sold is assigning a per-unit landed cost to each of the products in inventory. To calculate the per unit landed cost, find the sum of the direct expenses associated with the product, shipping, customs etc. and divide by the number of units purchased for the most recent batch order. If your per unit cost varies significantly by each purchase order it may make sense to take the average cost that is paid on per unit basis. Once you are ready to upload your product costs into Ecominate, navigate to the "Assign Product Costs" page. On the top left of that page click on the "Bulk Upload" button. On the Bulk Upload modal click the "Download Template" to download a spreadsheet of all of the SKUs related to your account.
Populating the inventory spreadsheet
The inventory spreadsheet that is downloaded lists all of the SKUs that were saved by Ecominate. Populate columns D, E, and F with the per-unit cost, nickname and supplier of each product where applicable. The cost per unit is mandatory although the nickname and supplier are not required. Once the spreadsheet is correctly populated, upload the spreadsheet using the "Bulk Upload" modal.
Assigning inventory asset and cost of goods sold accounts
Select the inventory asset account and cost of goods sold expense account to make adjustments. For help with how to make these accounts in Xero checkout this article.
Sending Cost of Goods Sold Journal Entries to Xero
After connecting to Xero, assigning product costs, and mapping the proper accounts, you should now have full access to the cost of goods sold page. The "Send to Xero" button sends a cost of goods sold journal entry to Xero. The details of which can be seen by clicking the expand icon on the left most column.