Generating reports - Cost of goods confusion
Nicky
Member Posts: 3
Hello
I am wanting to generate a report to show my income and expenses in order to complete my tax return. I have entered the correct dates that I require and run the report and it has given me figures for the following:
Income - Cost of Goods Sold - Operating Expenses = Net Profit
I understand where the Income has come from (all the invoices that I log and that have been paid) and the Operating Expenses covers my categories of things I buy for the business to run such as Materials, Packaging, Postage cost, Repairs and maintenance, Advertising etc. However I am not sure why it has put 2 categories in the Cost of Goods Sold section? It appears to have put Consumables and Print Cost in this section and I am unsure why as I haven't sold any Consumables (these are things like print cartridges that I have bought) and the Print Cost is what I am charged by my printer to have items printed (I design stationery and then outsource the printing)? Can anybody advise why these 2 are not in the Operating Expenses section along with things like Materials etc?
Many thanks!
Comments
@Nicky,
Cost of goods sold is a an expense category typically used by manufactures who produce an item for sale. You can either re-categorize the items there and set up an expense under Accounting/Chart of Accounts. Add a new operating expense or leave as is and just group it with the general and admin expenses.
Be sure if you are cash basis taxpayer that you run your sales as cash. It defaults to accrual which may mean you are declaring more income than you received.
Thanks Mike. I'm not sure what you mean by: "Be sure if you are cash basis taxpayer that you run your sales as cash. It defaults to accrual which may mean you are declaring more income than you received." I do use the Cash basis as I am a very small business - is there somewhere within Wave that I need to check whether it is using cash basis or accrual basis? Thanks
@Nicky,
When you run your income statement. Click on sales then top left change from accrual to cash. By using invoicing, Wave records income on an accrual basis. Currently there is no feature to run a cash basis income statement. You have to run each account that would be affected. The two typical are sales and purchases. Invoices and Bills create an entry in Wave even if cash has not been exchanged.
Many thanks Mike. As the dates I need are dating back to 6th Apr 2018 to 5th Apr 2019 for my 2018-2019 tax return (I am in the UK) all cash has been received for those invoices. Many thanks for your help.