Helping handmade, creative and craft business owners learn to handle their bookkeeping, one step at a time!
Helping handmade, creative and craft business owners learn to handle their bookkeeping, one step at a time!
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Cost of Goods Sold (COGS), in a nutshell, is ALL of the costs associated with the items you make or the services you sell or provide.
If you’re a maker, then it includes the materials you use in your finished items and all of the costs associated with selling that item.
As a designer, then it’s all of the materials and other costs that goes into getting that pattern out the door and sold.
And, if you’re a tech editor, then it’s the supplies that you use when doing an actual tech edit project for a client.
Depending on what your handmade or creative biz is all about you could call it different things – but they all mean the same thing.
![[My Handmade Biz] When does Inventory & COGS hit my bookkeeping? Sometimes it can be 2 or 3 years before you sell an item and get to recognize the COGS. This is why keeping detailed records is important.](https://yarnybookkeeper.com/wp-content/uploads/2020/01/2020-01-27-Inventory-to-COGS.jpg)
I bet you’re wondering, WHEN does Inventory & COGS (Cost of Goods Sold) hit my bookkeeping? More specifically when do project costs appear on your Profit & Loss Report under Cost of Goods Sold (if you want to go all accounting speak) and then what about my tax return? If you’ve been following along this month, you’ll find that I’ve …
Why do I need to track Cost of Goods Sold and WHAT exactly is it? Understanding what Cost of Goods Sold is and WHY it’s important to track it is certainly a confusing thing for most handmade and creative business owners. Let’s see if we can clear that up. Over the last couple of weeks we’ve talked about inventory – …