![]() or all goods sold or delivered within the period instead.Īs a default, the report will group by ‘status of goods’ which groups the line items into the following categories: Use the ‘Select Goods’ buttons to show either ‘Goods Sold’. ![]() Read on for an explanation of the other options that are available:Īs a default, the report will show you ‘Goods Delivered’ within the period selected. Simply select any filter criteria for the items you wish to include in the report, as well as the date constraints. The Cost of Delivered Report is found in the Quick Reports on the Accounts Dashboard. To do this choose the ‘Cost of Goods Sold or Delivered’ option. If you want to keep a running tally, one way to do it is at the end of each period, journal undelivered items to a liability account and expense the undelivered liability of previous period sales that you deliver within the current period. If you choose ‘Cost of Goods Delivered’, then you may be reporting your revenue and expenses in different periods so your ‘Profit and Loss’ Account might be slightly skewed between periods. If you choose ‘Cost of Goods Sold’, then you are possibly prematurely expensing undelivered items, so your inventory levels at any one time could be understated. Using ‘Cost of Goods Sold or Delivered’ OptionĮither ‘Cost of Goods Sold’ or ‘Cost of Goods Delivered’ are good options in terms of simplicity (provided you consistently use just one or the other), if you are only worried about having correct balances at the end of the year.This report is available to all customers on subscription levels that support product costing. Any of these journals can be imported to Xero. The report also provides a combined option, whereby you can account for all sales and deliveries within a period, using a ‘Sold, Not Yet Delivered’ liability account, (in addition to the ‘Asset’ and ‘Expense’ accounts used by the prior options) to journal and track the costs of goods within the period. Viola! Now the inventory balance on the balance sheet is the same as the physical count, and the cost of good amount is correct on the profit and loss statement.While many of our customers choose to journal their cost of goods at the invoice date, the ‘Cost of Goods Delivered Report’ gives you the option to journal these costs at the date of despatch instead. Record the cost of goods sold by creating a journal entry.Ĭredit the inventory account for the amount of the cost of goods sold. the inventory amount reflected in Xero at the end of the accounting period) usually end of month or financial year,Ĭalculate the cost of ending inventory by taking a physical count of the inventory on hand and multiply the quantity by the cost per unit.Ĭalculate the cost of goods sold (COGS) by subtracting the cost of ending inventory from the cost of goods available for sale during the period.ĬOGS = Cost of ending inventory - Cost of goods available for sale (i.e. When creating the invoice, select the inventory item from the "Item" drop-down menu and enter the selling price in the "Unit price" field.Īt the end of the accounting period, i.e. Record inventory sales by creating a sales invoice. When creating the bill, select the inventory account from the "Account" drop-down menu and enter the cost of the inventory item in the "Unit price" field. Record all inventory purchases in Xero by creating a purchase order or bill. Then, click on "Add account" and select "Inventory" or "Cost of goods sold" from the account type drop-down menu. To do this, go to the "Accounts" menu and click on "Chart of accounts". This includes creating an inventory account and an expense account for the cost of goods sold. The first step is to set up a chart of accounts in Xero. To use the periodic inventory method in Xero, business owners need to follow these simple steps:
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