There are a few ways to record Cost of Goods Sold (COGS) in QuickBooks when syncing Shopify orders as individual transactions. Which one fits depends on where your costs live:
Your products are inventory items in QuickBooks, and purchases (bills/POs) are entered in QuickBooks (or synced in from Stockroom) - QuickBooks records COGS itself on every synced order. Nothing extra to enable.
Costs aren't tracked in QuickBooks, and you use our Stockroom app for purchasing - use COGS (Stockroom) syncing: an accurate daily or monthly COGS journal entry calculated from your real purchase costs (Soar plan).
Costs aren't tracked in QuickBooks, and you keep a cost on each Shopify product - use our Daily COGS Journal Entry: a simple daily estimate of each Shopify product's current cost multiplied by the units sold or refunded that day.
Enable only one of these - combining them would record COGS twice.
When your inventory items exist in QuickBooks
This is the most common scenario we see with our users. As long as your products are present in QuickBooks as inventory items, and mapped to your Shopify products in MyWorks Sync > Map > Products, QuickBooks will correctly record the Cost of Goods Sold for each order when we create the invoice or sales receipt for that order in QuickBooks. There's no additional action MyWorks takes aside from creating the invoice or sales receipt in QuickBooks.
A couple helpful tips to be aware of in this scenario:
QuickBooks handles inventory costing on a FIFO basis, meaning that the inventory cost is recorded on a "first in - first out" basis: so the "oldest" inventory levels (and the associated cost they had when originally recorded in QuickBooks) are used up first.
The cost that a QuickBooks inventory level is initially recorded with is super important. If the product was created in QuickBooks with an inventory level of 5 but a $0 cost, QuickBooks will treat those 5 quantities as having a $0 cost when they're ordered in the future.
When you use Stockroom for purchasing
If our free Stockroom app manages your purchase orders and receiving, it knows your true costs - and MyWorks can post an accurate COGS journal entry per day or month, with a product-level CSV attached as evidence. This is the most accurate option when QuickBooks isn't tracking inventory itself.
The simple option: a daily COGS journal entry from Shopify costs
If neither of the above fits, MyWorks can post one journal entry per day estimating COGS as each Shopify product's current cost, multiplied by the units sold or refunded that day - debiting your COGS account and crediting your Inventory Asset account.
Enable it in MyWorks Sync > Settings > Inventory & COGS, under Daily COGS Journal Entry (Shopify Costs) - and set the correct COGS and Inventory Asset accounts for us to use.
Because it uses each product's current Shopify cost, it's an estimate - cost changes apply from that day forward, and products without a cost in Shopify contribute $0.
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