Shipping and Cost of Goods SoldAug 23, 2022
I get asked this question a lot: "Do I or should I enter shipping into my cost of goods sold?"
First, that's up to you as the business owner! You get to make that choice.
My advice: if shipping is an integral part of the cost of the inventory landing on your doorstep, it might be a good idea to enter that shipping into your cost of goods sold.
There are different ways to do this:
- You can divide the shipping and add it into the cost of each individual item, or...
- You can enter the shipping into the cost of goods sold section in the profit and loss statement.
Regardless of whether or not you enter shipping in your cost of goods sold, make sure you account for your shipping costs somewhere.
Also, be sure to decipher between the shipping for incoming freight and the shipping for outgoing to your customers.
Looking for more help with cost of goods sold and profit and loss statements? Come join me in The Boutique Workshop!