Mind if I ask why you would want to?  Logic normally is that if you don't have anything, it didn't cost you anything.  COGS = Cost of Goods Sold.

Only that I am a new user and if we had to quote the part quickly, I thought we would look up the cost in Sage 50.

Ok, in Sage 50 terminology, that's not COGS, that's the last/average individual cost of an item.  COGS is more the total of all of an item in stock or the cost of all the items that were sold on an invoice.  So if you have 10 in stock or sell 10 of an item on an invoice worth $10 each, your COGS or total cost is $100 but the cost of an individual item is $10.  It sounds like you want to know the $10.

Unfortunately, the last or average cost of an item is not updated until you actually make a purchase unless you have the Quantum version.  You might want to play with using one of the Additional Info fields for the expected cost as well as using one for the preferred vendor name.  You could add it to the report as well.

If you start a Purchase Invoice, Purchase Order, or Purchase Quote, and put in the item number, the last purchase price will be auto-filled for that item.

So if you're working on a customer quote, you can open the Purchase Quote / Order screen above or beside, and double check your pricing.

I'm not sure if it's possible in the Pro and Premium Editions, but in Quantum we set up a 'Last Onhand Cost' price and periodically use the price update tool (Setup | Settings | Inventory | Price List)  to update 'Last Onhand Cost' from Last Cost.    

Then anyone doing a quote or invoice can click on the recommended price and see the prices, including the last or PO cost.

As Richard explained, the Inventory List and Inventory Item record only show what's in stock right now, so it's no help when an item is out of stock.

*******************************************************************************************************************

Sage 50 stores:

OnHand Value (Cost) and OnHand Quantity for each Warehouse Location

Last Cost    for each location  

Last Purchase Price  for each location

and in Quantum there is an option to store and report on:

Last Quoted price from each Vendor

Last Purchase Price from each Vendor.

Randy

Good idea to use a customer Price list to store the cost.  He can then look it up right in the Price field of a customer quote, order or invoice.  I should have thought of it.  I guess I'm getting old.

I don't mind getting old, it beats all the known alternatives!

Great advice guys. I am using Premium. Here is another problem: When I run a report to see our sales vs our costs, it's not accurate because many items do not have a COGS. How do I run a report showing my true transactions?

If COGS is not part of the original entry, it will not show up on any report on an entry by entry basis.  You will have to use the income statement or run the reports from the inventory perspective (probably the Transaction Detail report).  However, you will not see any direct relationship of cost to an actual revenue amount.  I'm going from memory here but I do not think the Vendor or Customer names can be put on that report either.

I'm not sure what you mean by "If COGS is not part of the original entry". Can you explain that. I think we don't have the system set up properly and would love to get this cleared up.

What we want is for the actual costs of the items we purchased for the customer to be forever linked to it. The goal is to get accurate reports of how we are doing overall and with specific customers.

Thanks in advance,

Mike  

If you follow the normal course of events in a typical business, the items are purchased, received, entered into the system and then sold.  If you want to track inventory, you must use inventory items.  If you use inventory items in purchases and sales in the order I suggested, then there will be a cost associated with each entry.

You haven't told us how you are doing the data entry (or as you say, "don't have the system setup properly") so that the above doesn't happen for you.  However, one way it can happen (eg. COGS will not be part of the sales entry), is to sell an item before you record any purchase.

If you follow the normal course of events in a typical business, the items are purchased, received, entered into the system and then sold.  If you want to track inventory, you must use inventory items.  If you use inventory items in purchases and sales in the order I suggested, then there will be a cost associated with each entry.

You haven't told us how you are doing the data entry (or as you say, "don't have the system setup properly") so that the above doesn't happen for you.  However, one way it can happen (eg. COGS will not be part of the sales entry), is to sell an item before you record any purchase.

We are holding off on the receiving until we get the supplier invoice with the final costs. So are doing what you described above with the exception of shipping inventory before we receive it in Sage. Could this be it?

It depends.  You have not told me what stage you are at with your data entry and your business.  I would say yes, if you have never posted a purchase invoice for those items.  Look up the sales invoices and see if the journal entry shows the costs moving from the asset account to the expense account.  I would suspect it is not there in the journal entry.

I haven't double-checked this in a few years but I believe if you have posted a purchase entry in the past, then even if you do not have any stock when you sell an item, the last cost will be part of the sales entry as the cost.  If that cost is different when you finally post the purchase invoice, there will be a variance entry to balance the true costs of items left in stock.

This variance concept is a more complex part of inventory management so if you are not sure of what this means, then I would suggest you take a copy of your file, post some entries in the copy and look at all possible reports after each entry so you can see what is going on.  Change the order of the entries (eg. create an item, post one item sale first, look at reports, post purchase, look at reports, then create another item, post a purchase, look at reports, post a sale, look at reports, then make there is no stock on one item, post a sale, look at reports, then post a purchase for a different cost, look at reports, etc.).  Do not always use the quantity of 1 for both the purchase and the sale.  Make sure there you do everything over again with quantities that are larger than 1 unit.  When you see a purchase invoice posting an entry to an expense account when only a properly set up inventory item is on the invoice, you probably have a scenario where a variance has been posted to balance the asset account to the proper cost of what is left in stock.

This exercise will help you understand what is going on in the background.  Set aside some time where you won't be interrupted and track it on paper.  Setup the entries before you start on paper and record what you expect to see by recording the cost and/or revenue at each point.  Then post the entries and see if you get what you think.  If not, then try to figure out why.

Norlite Mike said:

We are holding off on the receiving until we get the supplier invoice with the final costs

If you use Purchase Orders, and record incoming goods when they cross your door, and hold your vendors to the price(s) they promise as much as possible, you'll sort out nearly everything.

Provided 'negative inventory' is replenished during the financial year, the accounting system will give the 'right answer' for the income statement and balance sheet.  

But the costing for individual invoices will be a hopeless mess.