FrontAccounting forum — Is Cost of Goods for Services actually used?

Re: Is Cost of Goods for Services actually used?

null@example.com (bobloblian) — Thu, 09 Dec 2021 00:31:41 +0000

Hi Joe,

Thanks for the clarification, tested and working as you described.

Re: Is Cost of Goods for Services actually used?

null@example.com (joe) — Wed, 08 Dec 2021 09:18:44 +0000

Hello,

The COGS account in the Service Items is only used if you buy this type of service from a vendor (supplier) and resell it to your customers.
Otherwise just ignore the COGS field.

Joe

Is Cost of Goods for Services actually used?

null@example.com (bobloblian) — Wed, 08 Dec 2021 01:33:31 +0000

Hi Gurus,

When setting up a service item, there is an option to set the COGS account. My understanding when selling a service item that there is no asset to transfer to the COGS account, so it wouldn't be used? To be sure, I tried invoicing a few service items in my test environment and as expected nothing was added to the COGS account.

That got me to wondering what it is there for?

I thought maybe it's an AP thing? Tried in my test environment doing a direct supplier invoice, paid it, sold it and paid that, but nothing is showing up in the COGS account that way either.

So I am still wondering, is there a use for that account on Service items? if so, can anyone enlighten me?