What COGS means
(and what it doesn't).

COGS — cost of goods sold — is one of the most misunderstood lines in any small-business P&L. The confusion comes from mixing it up with supply purchases. The rule below clarifies.

01 What COGS is

COGS — cost of goods sold — is the materials cost of what your customers consumed today. For a café selling 80 cappuccinos at €0,42 COGS each, the day's COGS is 80 × €0,42 = €33,60. The number scales with sales, not with supply runs.

COGS is a per-day total that depends on per-sale unit costs. If you sold 80 cappuccinos and 20 sandwiches today, the day's COGS = (80 × cappuccino COGS) + (20 × sandwich COGS).

02 What it isn't

COGS specifically excludes:

• Supply purchases. The €280 of beans you bought on Tuesday isn't COGS — it's inventory. COGS reflects what you sold, not what you bought.
• Rent and salaries. Those are fixed costs, allocated separately.
• One-off expenses (packaging, repairs, spoilage). Those go on the Expenses tab in their own categories.

03 Two paths into COGS

COGS lands in your daily total via one of two paths:

• Product sales auto-fill COGS from the product's per-unit snapshot. 80 cappuccinos × €0,42 = €33,60, no typing required.
• Manual revenue entries don't carry COGS by themselves. If you log revenue without products, you also need to log your estimated COGS as an Expense line.

Most owners run a hybrid: product sales for the high-volume items, manual entries for catch-all, and a weekly COGS estimate as a top-up Expense.

04 Tuning your COGS values

A product's COGS field is just an estimate — you set it when you create the product, and it stays until you update it. Real per-unit costs drift over time (suppliers raise prices, recipes change), so revisit your COGS values quarterly:

• Audit per-unit recipe. Beans + milk + cup + lid for a cappuccino. Sum the current prices.
• Compare to typed COGS. If your stored €0,42 is now actually €0,48, bump it.
• Future sales use the new value. Past sales keep their snapshots — historical numbers stay honest.