Help understanding the "Cost Of Goods Sold" Report

[lennys26]

I have finished my first month of sales and am reviewing the available reports and am somewhat confused with the COGS report.

My numbers are simple as it is the first month...

NAME	QUANTITY SOLD	COGS	TOTAL REVENUE	PROFIT	PROFIT MARGIN
Oatmeal	2	€4.80	€10.82	€6.02	55.6%

The item costs me €2.40 to purchase, and I sell it at €5.95, including a 10% tax.

This should mean a TOTAL REVENUE of €11.90, being 2x €5.95 (or €10.71 if removing the tax), and a PROFIT of €7.10 being €11.90-€4.80 (REVENUE-COGS) or €6.39 if removing the tax.

What am I misunderstanding?

In a second example, I have another item which I purchase at €1.10 and sell at €1.95 including 10% tax. This means that the sale price not including tax would be €1.755 (1.95-10%), however the report is showing it at €1.77. Are there any thoughts as to what seems to be an incorrect calculation?

[VanKalkerFarms]

This would be more for a Square employee to weigh in on, but when the tax gets included I have seen quite a bit of issues with small amounts being off.

[MayaP · Accepted solution]

Hey @lennys26, I apologize for any confusion. 

We use Net Sales which is defined as Item Sales + Modifier Sales - Discounts - Inclusive Tax.

In your example, €5.95 is the sales price inclusive of a 10% tax. €5.41 is the sales price exclusive of that 10% tax. So the total revenue informing profit for two quantities is 2x €5.41 = €10.82.

Sales are usually inclusive of Tax, but that tax is subtracted from COGS, revenue, & Profit Margins in the report. Our COGS calculations are up-to-date with industry-standard COGS reports. 

I hope this clarified some things!