Not sure which inventory report you need? Start with Inventory, COGS or Snapshot: Which Report Do I Need?
What This Report Tells You
The Cost of Goods Sold Report shows what the goods you sold over a date range actually cost you, in the costing method your accountant uses: FIFO or Weighted Average.
It answers one question: what did my goods cost me, and what did I make on them?
For each item you get units sold, sales revenue, COGS, gross profit, gross margin, and the value of the inventory left at the end of the period. It covers every item marked as an inventory item in Dockwa, including ship's store goods, parts and fuel.
How to Run It
Go to Reports and select Cost of Goods Sold.
Choose your start and end dates. It defaults to last calendar month.
Choose a Costing Method: Weighted Average (the default) or FIFO. Use the one your accountant uses, and use it every month.
Click Export. The file appears under Recent Exports when it's ready.
The Three Tabs
Summary: one row per item, with a totals row at the bottom. If you've set up GL codes, a GL Code (revenue) column appears and the totals are also subtotaled by GL code. This is the tab most bookkeepers need.
Calculation Detail: the math behind each item's COGS. Its layout depends on the costing method:
Weighted Average: one row per item, showing beginning units and value, purchases in the period, the weighted average unit cost, units sold, COGS and ending value.
FIFO: one row per delivery (a "lot"), oldest first, showing when it was received, vendor, reference number, unit cost, how many units sold from it, and how many are left. Lots received before your start date are marked Carried in.
Source Data: every purchase, vendor return, sale and customer return the report used, with an In period column so you can tell history from the period itself.
How COGS Is Calculated
Both methods use the same records: every inventory delivery up to your end date, and every sale and return in the period.
Weighted Average blends the cost of what was already on the shelf with what you bought during the period into one average unit cost, then multiplies it by units sold.
FIFO (first in, first out) assumes the oldest stock sells first. Each delivery keeps its own unit cost, and sales use up the oldest deliveries before newer ones.
Either way, COGS plus ending inventory value always equals the cost of goods available in the period.
Things Worth Knowing Before You Read It
Enter a cost when you receive inventory.
Every number in this report depends on the price entered on your deliveries. A delivery entered with no price, or at $0, is valued from that item's other priced deliveries and flagged Unpriced receipts. An item that has never had a priced delivery shows a dash instead of a cost, never $0 COGS and a 100% margin.
FIFO and Weighted Average give different answers.
That's expected. Pick the method your accountant uses and stay with it so month-to-month numbers compare.
Sales revenue is after discounts.
Gross profit and margin reflect what you actually collected, not your list price.
Returns to a vendor aren't COGS.
Sending stock back reduces inventory at cost. Only goods sold to customers count toward COGS.
Some items draw from another item's stock.
If you sell singles out of a case, those sales roll up into the parent item.
Watch the Flags column.
Oversold: more units sold than Dockwa has deliveries for. The extra units are costed at $0, so COGS is understated. Usually a delivery was never entered.
Unpriced receipts: a delivery was entered with no price or at $0. Those units are valued from the item's priced deliveries, so the cost is an estimate.
Net returns: customers returned more units than were sold in the period. Units sold shows as negative and the stock goes back on the shelf. Not an error.
When to Use It
Close the month.
The Summary totals are your COGS journal entry for the period, already split by revenue GL code if you've set them up.
Value ending inventory.
Ending inventory value is the balance-sheet figure for stock on hand at the end of the period, in the same costing method.
Find your real margins.
Sort the Summary by gross margin. Because revenue is after discounts, this shows what each item actually earns at the register.
Retire the spreadsheet.
If you build COGS by hand each month, this report does the same calculation from your deliveries and sales, with the math visible on the Calculation Detail tab.
Common Questions
Which report should I use: Inventory, Cost of Goods Sold or Inventory Snapshot?
Use Cost of Goods Sold for COGS and margin over a date range. Use Inventory Snapshot for what your stock is worth on one date. Use the Inventory Report for what you paid vendors and how stock moved. It isn't a COGS report.
Why is there a dash instead of a cost?
No delivery for that item has ever been entered with a price. Enter a price when receiving inventory and the figures will fill in.
Why does my COGS look low?
Check for the Oversold flag. Units sold beyond recorded deliveries carry no cost.
Why doesn't last month's ending inventory match this month's beginning?
Under Weighted Average, beginning stock is recalculated from your full history each time you run the report, so a delivery entered late changes past figures. FIFO carries each lot forward as it is.
Why is an item missing?
It isn't marked as an inventory item. Open the item on the Items page and check Track inventory for this item.