Cost of Goods Sold (COGS) is the cost of producing the products sold by the company. The amount of COGS is based on how much cost of production such as raw materials, labor wages, distribution cost, etc. The cost of goods sold is also referred to as the "Cost of Sales"
On DealPOS, there are 3 calculations for COGS when doing Re-Stock products. These are Manual, Average, and Last Order. You can choose one of these calculations according to your needs. To set up the COGS for your company, you can follow the steps below.
I. How to Configure
Step 1. Go to Setup, Click More Menu, then Choose Module
Step 2. Choose Buy Tab then select the COGS Calculation Configuration
Important Notes:
In the latest version, we have extra configuration in COGS Calculation, you can choose either want to Recalculate COGS when deleting Invoice or not, default value is set to be Yes
COGS Calculation
You can see the table below to see how those three kinds of COGS calculations will work according to your needs:
Column | Description |
Manual | Manual Calculation, The products cost will be set according to the buying cost that has already been entered the first time when you add the products |
Average | Average Calculation, The products cost will be calculated according to these formulas =
|
Last Order | The product's cost will be set according to the Last Buying Cost from the products |
II. How the COGS Work
The example below will tell you how those 3 types of COGS will work:
A. Manual COGS
Set the COGS to Manual as shown in the first step above.
Step 1. Go to Product then Set Product Unit Cost
For example, we try to set the product "T-Shirt" Buying Cost to Rp. 40,000
Step 2. Go to Buy then Make Purchase Order
Buy Product from Buy Menu with a different Buying Cost from the Buying cost product.
Then we bought the product for 1 qty, but with different Buying Costs, the new Buying cost is Rp. 55,000.
Step 3. Go to Product then View Variant Detail of the Product
The buying cost from that product will not be changed and will always be the same as the first time we input the Buying Cost of the product when we create the product
B. Average COGS
Set the COGS to Average as shown in the first step above.
Step 1. Go to Product then Set Product Unit Cost
For example, we try to set the product "T-Shirt" Buying Cost to Rp. 55,000
Step 2. Go to Buy then Make Purchase Order
Buy the product in the Buy menu with a different Buying Cost from the Buying cost product.
Then we bought the product for 1 qty, but with a different Buying Cost, the new Buying cost is Rp. 65,000.
Step 3. Make Second Purchase Order
Buy the product for the 2nd time in the Buy menu with a different Buying Cost from the Buying Cost product.
After the first purchase, then we bought the product for 1 qty again, but with a different Buying Cost than before, the new Buying cost is Rp. 50,000
Step 4. Go to Product then View Variant Detail of the Product
The buying cost from that product will be changed according to the average Buying cost from those 2 Purchase transactions with different buying costs. As you can see from the image above, the product's cost is changed to Rp. 56,000 after we've made 2 Purchases with different Costs. The first purchase was Rp. 65,000 and the 2nd purchase was Rp50,000 Then, the calculation will be like this:
{( Last Price * Old qty + New Price * New qty ) / (Old qty + New qty)}
The first transaction counted as this:
(0*56,000) + (1*65,000) / (0+1) = 65,000
And the second transaction counted as this:
(1*65,000) + (1*56,000) / (1+1) = 56,000
Then the final result from that product's Buying cost will be set to Rp. 56,000
C. Last Order COGS
Set the COGS to the Last Order as shown in the first step above.
Step 1. Go to Product then Set Product Unit Cost
For example, we try to set the product "T-Shirt" Buying Cost to Rp. 56,000
Step 2. Go to Buy then Make Purchase Order
Buy the product in the Buy menu with a different Buying Cost from the Buying Cost product.
Then we bought the product for 1 qty, but with a different Buying Cost, the new Buying cost is Rp. 60,000.
Step 3. Go to Product, then View Variant Detail of the Product
The buying cost from that product will be changed according to the Last Buying Cost that we set before when making a Purchase Transaction with a different cost.
Related Articles
If you want to make 2 steps for the buying process (proposed - approve), you can read the article here: How to Activate Approval when using Buy (2 Steps)
If you want to make a Purchase Return, you can read the article here: Purchase Return
If you want to make the Supplier name required when buying, you can read the article here: Supplier Required in Buy Menu
DealPOS is an online point-of-sale (POS) application specifically designed for retail businesses in categories like Fashion, Minimarkets, Electronics, Fresh Food, and Building Material Stores.
With DealPOS, you can manage both online and offline store inventory in real-time on a single platform. You can also sell through omnichannel (offline and online) as DealPOS integrates with marketplaces (Shopee, Tokopedia, TikTok Shop, Lazada) and instant web stores (Shopify and WooCommerce).