Any tax related reason to track inventory in Quickbooks?

[songofish]

Hi,

Our company tracks inventory via spreadsheets; however, we only track sales in Quickbooks (sales tax is based off of these numbers) - we don't update our inventory stock status however (for example when we order more supplies to restock.) Is that going to be a problem?

 

[bugtussellmom]

Cogs?

The software calculates cost of goods sold whenever you create a sales invoice. Are you making a journal entry to book cost of goods sold? COGS is found on the trial balance, after sales, and before the overhead expenses. Look at the ledger before and after creating the sales invoice. That will help you to determine if QB's is making that entry for you and if its correct.

You may want to google a term: First In --- First Out. If you are not entering purchases then your cost is all wrong.