how to keep COGS accurate for additional reasons?
I found it confusing when I am done with last month’s COGS calculations. But, this month, I might get returns or damaged goods from my customers. So do i have to recalculate the COGS from the last month? And, how?
It sounds like you are doing the COGS calculation manually. (yikes!) Doing this kind of thing manually or even using Excel can lead to major errors. I recommend that you consider using an accounting software like QuickBooks. QuickBooks will automatically calculate your COGS and incorporate any returns or damaged products into your calculations. No need to go back and recalculate the COGS from a prior period, you will just calcul
ate it for the current period.
Crystalynn Shelton, CPA