Bulk Items and COGS
Quite often I see this in the QB forum, a question about bulk inventory items and how to track them for COGS. Mostly from restaurants, but also from auto service where they buy bulk oil and shop supplies.
It is pretty hard to track how much flour (as an example) you use on a day to day basis, and yet flour is an inventory item and its’ cost should be tracked.
What I suggest is to order and stock your flour and stock it in the container it comes in. In other words if you order 10-pound bags, then stock it by the bag.
When you take a bag off the shelf to use it in the kitchen, use inventory adjust and set the adjusting account to COGS, then lower the quantity of the items taken off the shelf and click ok.
It is not a 100% day by day accurate way to track bulk items but over time it works out just fine since the only reason you would take a bag off the shelf is because the old bag is used up.
Use your imagination and replace flour with what ever you are buying in bulk, booze, salt, grease, oil, solvent, what ever.
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