Who this applies to#
- Use cost of goods sold for the products included in the matching sales period
What Cost of goods sold requires#
- Record cost per item before the sale if you expect product-level profit reporting to include it
Shopify
Shopify profit reports depend on cost per item recorded for products and variants when they are sold
What this does not require#
- Cost of goods sold does not include every operating expense paid by the business
Common mistakes#
- Using current product cost for historical sales without checking the reporting method
- Treating COGS as total business expenses
Cost of goods sold checklist#
- Define included costs
- Match costs to sold units
- Reconcile returns
- Calculate gross profit