COGS vs Sales Inv

MJV_10433200
MJV_10433200 Member Posts: 6 Reckoner Reckoner
in Reckon Accounts (Desktop)

Hi, Please help!

New to all this, and im getting myself confused. i want to know the best way to process the following through my reckon book

I buy an aircon, I sell an aircon, (no markup), I charge a fee for the service to install (my income)

Would you do this under GOGS purchase / sale for the inventory item and then bill my service/time?


Or easier just to do sales inv for time and offset aircon purchase/sale against expense account?


Thanks

Comments

  • Acctd4
    Acctd4 Accredited Partner Posts: 4,208 Reckon Accounts Hosted Elite Expert Reckon Accounts Hosted Expert

    It depends how you want to view your financials. On your Profit & Loss it will show Income minus your COGS = Gross Profit minus your Expenses = Net Income.

    The air con is a direct COGS - eg itโ€™s a purchase cost that you incur in order to sell it.

    Your service fee for installation can be either - some people like to include that as a COGS also, others prefer to show it as an expense.

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  • Zappy
    Zappy Accredited Partner Posts: 5,252 Accredited Partner Accredited Partner

    If you are not going to run inventory then you can simply record the purchase as an expense and tag it as cost of sales. You don't need to run inventory unless you are carrying physical stock.

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