This article explains the reasons your COGS in QuickBooks Desktop might not match what you see in Point of Sale.

Why this is happening

  • Items have an incorrect cost entered or were received at an incorrect cost.
  • Items had a cost entered after a sale was made
  • Point of Sale isn't pointed to the correct QuickBooks Desktop COGS account
  • There are adjustments to the QuickBooks Desktop COGS account that won't be reflected in Point of Sale
  • Transactions sent to QuickBooks Desktop from Point of Sale have been deleted
  • The receipt was marked as sent to QuickBooks Desktop before the financial exchange could actually send it
  • You have purchased and received inventory in bulk and then sold it as individual component items

How to fix it

Solution 1: Make sure item costs were entered and correct at the time of sale

The best way to see whether items have a zero cost is on an Item Summary report:
  1. Choose Reports > Sales > Item Summary.
  2. Make sure you've cleared all filters and customizations: Click Modify and then click Revert.
  3. Click the Item Name column header to sort and group by Item.
  4. Look in the Ext Cost column for 0.00 dollar amounts. Also, inspect other item costs to make sure they are what you'd expect. If there are no items with 0.00 dollar amounts, try Solution 2.
How to fix it:
  1. Make note of the name of the item or items that have 0.00 ext cost.
  2. Choose Inventory > Item List.
  3. Bring up each item one at a time and click Edit.
  4. Look at the History report to determine how many items were sold without a cost. You should see an adjustment transaction listed. Anything sold after it likely did not have a cost.
  5. Multiply the quantity sold by what the individual item cost should have been.
  6. Go to QuickBooks and create a manual journal entry that debits Inventory asset and credits Cost of Goods Sold for this amount. To prevent this issue in the future, be sure you are receiving items on a voucher and not manually entering quantities as you add new items.

What if I still have an On-Hand QTY for these items?

  1. Edit the item and enter the correct item cost in the Avg. Unit Cost field.
  2. Click Save. An adjustment will be sent to QuickBooks next financial exchange that increases your inventory asset. The next time you sell this item, it will now have a cost.
 
Solution 2: Check that preferences and items are connected to the right COGS account

  1. Check your Point of Sale preferences:
    1. Choose File > Preferences > Company. (Version 9 and below: Edit > Preferences > Company.)
    2. Under Financial, select Accounts.
    3. Make sure the Cost of Goods Sold account is correct for each Item type listed.

     
  2. Check each item's preference:
    1. Choose Inventory > Item list.
    2. Right-click any column header and choose Customize Columns. Make sure COGS Account is selected.
    3. Click the COGS Account column header to sort by COGS account. Make sure there are no expected accounts listed for each item.
How to fix it:
  1. Click the COGS account name in the item list and select the correct account.
  2. In QuickBooks, use a General Journal entry to transfer the amount from the wrong account into the right one.
 
Solution 3: Look for manual adjustments from Point of Sale

Check for Point of Sale adjustments:
  1. Choose Inventory > Quantity Adjustment History.
  2. Right-click any column header and choose Customize Columns.
  3. Add Diff Cost to the Chosen Columns list and then click Save.

    • Make note of any quantity adjustments made in error and unexpected amounts in the Diff Cost column.
    • To see where these funds were moved to in QuickBooks, double-click an entry and then choose I want to > View Financial History. Click Open in QuickBooks.

     
  4. Choose Inventory > Cost Adjustment History.
  5. Repeat Steps 1b - 1c to inspect Cost Adjustments.

How to fix it:
  • You can easily reverse any Point of Sale adjustments made in error by choosing I want to > Reverse Memofrom Qty adjustment or Cost adjustment history.
  • In QuickBooks, you can always create a general journal entry to transfer the amount from an incorrect account to the correct one.
 
Solution 4: Make sure Point of Sale transactions weren't deleted in QuickBooks Desktop or marked as already sent

If you suspect receipts have been deleted or marked as sent, and you are sending detailed transactions to QuickBooks, look at each receipt's Financial History. From Sales History, choose I want to > Show Financial Detail:

  • If it's marked Sent to QuickBooks Successfully, but there are no Open in QuickBooks buttons, this receipt and it's recording entries may have been deleted in QuickBooks. Consider selecting Resend this document during the next Financial Exchange if you can't find it in QuickBooks.

     
  • If it's marked Not sent, look to see if Mark this document as successfully sent is selected. If this receipt is supposed to affect your COGS account, click to clear the Mark... as sent checkbox and then click OK.
 
Solution 5: If you receive items in bulk, make sure you are receiving and selling at the correct quantities

There may be times where a bulk item, such as gravel, is received as one type of quantity (for instance, a ton), and then sold as a different quantity (a square yard). If this is occurs, it has serious ramifications for your COGS account.

Choose Inventory > Item to inspect items that may fall under this category. Click Show Details to see the Historyfor each. Make sure Receiving Vouchers and Sales Receipts show reasonable quantities and prices.

How to fix it:

If you're in this scenario, a simple general journal entry in QuickBooks can correct the issue. To fix without a journal entry, you will have to reverse and reenter each receipt where the quantity was entered incorrectly.