Cost of Goods Sold Accrual Report

Top  Previous  Next

The Cost of Goods Sold Accrual Report is accessed through the Reports Window, Accounts Payable folder.  Accrued Cost of Goods is merchandise ordered, but not yet paid, from the Vendor for which you have invoiced to the Client.  This report displays Components that meet this condition grouped by the future Cost of Goods Sold Account into which their cost will eventually be realized.

 

cogs accrual report window

 

The Cost of Goods Sold Accrual report displays the Purchase Order upon which the Component was included, the Ordered Date of the Purchase Order, Client Invoice Date, as well as Estimated Costs for each Component.  The report can be printed retroactively as of certain month by adjusting the Fiscal Cut-Off selection appropriately.  Ranges for Clients and Projects are available to narrow the scope of the report.  To remove a Component from this report, simply remove the Component from the Purchase Order or delete the Purchase Order in its entirety.

 

Calculating accrued costs is a valuable tool in assessing a more accurate net income of the company.  Invoicing the Client for merchandise not yet paid to the Vendor artificially inflates the company's net income as no cost is present to reduce the profit of the merchandise.  An Auto-reversing Journal Entry can be created on a monthly basis to transfer the accrued costs into the appropriate Cost of Goods Sold Account while being offset with an Accrued Cost Liability Account.  Doing so will increase the Cost of Goods Sold on the Income Statement thereby reducing the company's net income.