Cost of Goods SoldĪssuming we are not tracking inventory or even looking at it for that matter, but we just want to know your cost of goods for the month. ![]() For most basic stores, this is the only information you need from Shopify to quickly record or calculate the cost of goods sold. Items shipped – items returned = net sales. Shopify records the total unit number of items that were shipped out each month. What information did you not enter into your store? Your cost of goods Shopify Tracks Net Sales If you set up your inventory properly, it will track inventory and tell you how many units you have. Shopify helps you track your sales, refunds, discounts, and exchanges. Now that we have set a baseline lets understand why Shopify fails to address this: Shopify’s Shortcomings But the core concept of the cost of goods sold is the cost to acquire the product you have sold. Now if you manufacture your own goods, it gets even more complicated, above the scope of this post. For example, if you sell t-shirts online you’ll have multiple ‘costs’- the cost of the shirt, the import fee you pay, the shipping to get your product to your facility. What Exactly Is Cost of Goods Sold?Īny accounting book will tell you that these are the expenses directly related to the sale that occurred. You can set up an online store with an enticing theme in a matter of minutes however, Shopify’s financial center lacks the robustness for helping you track your cost of goods. Shopify, a leading platform for e-commerce companies, is a great product. ![]() Under accrual-based accounting (the concept of matching revenue to its associated expenses), for us to record sales, we need to record our cost of goods. The following post will show you a quick way to calculate the cost of goods sold for a set period. This can be complicated or easy depending on your products and your accounting for inventory. What these blogs have not gone into much detail about was the recording of your Cost of Goods. We have previously discussed the numerous ways to record Shopify sales, showcased here.
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