How should we be handling shipping?

Question

We currently have shipping entered as a stock item in inventory. When someone receives an order that contains shipping, the unit cost of shipping reflects the amount we were charged for shipping on that order. This has done a number on our reports. Can someone please give me some insight as to how we could fix this problem?

Best Business Strategies · Answer

It sounds like you set up your shipping as a "STOCK" item class and not as a "SERVICE" item class. You cannot change the item class but you can make the item ID inactive. Create a new shipping using income and cost of sale GL account numbers.

As for the shipping taken to inventory, make a general journal entry to correct the accounts affected.

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How should we be handling shipping?

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