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 810w, https://yarnybookkeeper.com/wp-content/uploads/2020/01/2020-01-27-Inventory-to-COGS-300x128.jpg 300w, https://yarnybookkeeper.com/wp-content/uploads/2020/01/2020-01-27-Inventory-to-COGS-1024x436.jpg 1024w, https://yarnybookkeeper.com/wp-content/uploads/2020/01/2020-01-27-Inventory-to-COGS-150x64.jpg 150w, https://yarnybookkeeper.com/wp-content/uploads/2020/01/2020-01-27-Inventory-to-COGS-768x327.jpg 768w, https://yarnybookkeeper.com/wp-content/uploads/2020/01/2020-01-27-Inventory-to-COGS-141x60.jpg 141w)
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 …
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 …