Accounting help needed - Accounting Software Categories

January 15, 2017 5:31 PM

I'm currently purchasing parts and packaging materials for a product I'm producting and I have a few questions about categorizing expenses. All of the items below are being purchased from different vendors and I'm packaging everything together. I'll give you a few examples and if you could, please recommend a proper way to categorize the expense. 1) The product itself 2) Screws 3) Zippered poly bags to contain the screws 4) A printed insert with instructions 5) Poly bag to contain everything 6) A printed cardboard bag topper stapled to the poly bag packaging. That's really about it. I'd like to start entering in my invoices into my accounting program, but I really don't know the best way to organize these expenses. Thanks for your assistance. I really appreciate it.
posted by Jackie_Treehorn to Work & Money (4 answers total)

If it's all part of the product it's all Cost Of Goods Sold.
posted by bitdamaged at 5:52 PM on January 15, 2017 [3 favorites]

Yes, there is no categorization or organization to be done here. Cost of Goods Sold.
posted by kindall at 5:57 PM on January 15, 2017 [2 favorites]

If you want to understand your costs of individual items as they fluctuate and as a percentage of the whole, you can categorize them as COGS: Goods, COGS: Screws, COGS: Packaging.
posted by Nimmie Amee at 6:11 PM on January 15, 2017 [3 favorites]

for tax purposes putting everything into COGS is plenty adequate; to set up some cost accounting if you're interested in analyzing what you're spending on packaging, for example, vs. integral components you could set up sub-accounts.
posted by randomkeystrike at 7:47 PM on January 15, 2017 [1 favorite]