• Registered: 10/27/2014
  • Posts: 3

Topic: COGS for Services

Hi All,

A newbie in FA and one in Accounting domain as well. I have a case I'm trying to find a solution for. It goes as below

1. Add an item as a sevice
2. Assigned Category and Item Type as "Services"
3. Assigned Sales Account and COGS Account as "Wages and Salaries" (This is for a consulting services)
4. Added Sales Pricing and Standard Cost
5. Created a sales order for this services and made a delivery

As per my understanding, the Sales Account should be updated with Sales Pricing and COGS Account with Standard Cost. In my case, I can see the "Sales Account" getting updated but not the COGS Account.

Can someone help  here ? Its a little urgent.

  • joe
  • Administrator
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  • Registered: 03/15/2007
  • Posts: 5,107

Re: COGS for Services

The COGS account is not updated due to the fact that it is a service item. If you buy this service from a supplier the COGS account will be updated.

Joe

  • Registered: 10/27/2014
  • Posts: 3

Re: COGS for Services

Hi Joe,

I tried few cases in between now.

Found that it works with when the COGS for a service is mapped to the account items under "Cost of Goods Sold" account group. But
when mapped to any other expense Account groups say "Wages and Salaries", it doesnt work.  I suspect there is some hardcoding done in the core or possibly the GL report query is omitting that. Can you check this case please

  • joe
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  • Registered: 03/15/2007
  • Posts: 5,107

Re: COGS for Services

The CoGS account for service items is only used when you are buying this service from a supplier. Service items do not have any COSTs during sales.

/Joe

  • Registered: 10/27/2014
  • Posts: 3

Re: COGS for Services

Joe, Thanks for replying and I'm sure you know a lot than me on FA, but I think you should try the above case and see if what I found  with the test case above mentioned.

  • From: Singapore, India, Chennai
  • Registered: 05/02/2009
  • Posts: 6,160

Re: COGS for Services

Wages and Salaries are an expense at the hands of the company being accounted for. You will need to create a Salaries Received (Sales) Account for your purpose.

apmuthu's Website

7 Reply by isaacblakejose (edited by isaacblakejose 12/12/2014 06:52:43 am)

  • Registered: 12/12/2014
  • Posts: 1

Re: COGS for Services

COGS for a manufacturing company would be the raw materials used to make the products they sell. For a retail company, COGS is the cost of buying the items they sell in their store.