Product Cost vs. COG (Cost of Goods)
| Product Cost** | COG/Inventory Cost | |
| Global or Specific to Warehouse | The same for all warehouses | Specific to each warehouse |
| Calculation | Moving average: Last 60 days from today (not the date in the report). Or the most recent receipt if no other transactions within 60 days. | Moving average: 60 days from the last known receipt or transfer |
| Transfers | Not impacted by Warehouse Transfers | The cost of a product from the source warehouse is averaged into the product's COG at the destination warehouse |
| Location in VMS | Some reports | Some reports, Last Cost on the Product Detail screen |
**In the future, Product Cost will not be used. Instead, Inventory Cost/COG will be applied in reports and other areas of Gimme's data.
COG Definition and How to Verify
In Gimme VMS for Windows version 1.3.28, we introduced a new calculation for COG.
Starting with the last known receipt/transfer, containing the product in question, Gimme averages product cost documented in receipts and transfers from other warehouses from the previous 60 days.
How to verify COG for a product
- At the bottom of the Product Detail screen, toggle to view Receipts & Transfers
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- Note the most recent transaction date
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- Select the red menu button
- Select Product History Log
- Set the date range to 60 days in the past, starting with the date of the most recent receipt
- Filter transactions to Receipts, Transfers, or All
- Select the individual receipts/transfers to view the cost and quantity received
Below, a spreadsheet shows the quantity of cases documented on the receipts listed in the product history pictured above.
Calculation for COG:
$ sum of 60 days from the last received transaction
÷
(sum of the unit of measure qty. on each receipt/transfer × the unit of measure conversion factor)
Warehouse Value and Cost of Goods Sold (COGS)
Generally we see operators exploring the value of the products in their warehouse for two main reasons:
1. Accountability. Expected versus Actual, or Variances. This helps track shrink in the warehouse, and gives clues to identify the source of the shrink. "Is someone stealing? Did we forget to enter a Receipt or track a Transfer to another warehouse? etc".
2. Accounting. Balance Sheet. What is the dollar value of the stuff in your warehouse, and what is the dollar value of the product you have placed in the field that hasn't sold yet?
Overall, it's important to point out that Gimme is not accounting software.
We provide the answers to the questions above to help management, and leadership, make an informed decision on how to operate their businesses. There are differences, and limitations, in how we calculate COGS when compared to a Financial Accounting Package. For most operations, these differences are likely trivial.
Different reports will help you see the data above in different ways. The biggest components in calculating either is Product Cost and Product Quantity. The first is discussed above. The second is directly connected to doing a Warehouse Inventory.
Click the following link to learn the steps and best practices for completing a full, or partial, Warehouse Inventory: How to complete a warehouse inventory
1. Accountability. As it relates to reviewing product variances at the Warehouse, the best view for this isn't a Report. It is reviewing the Completed Inventory screen, found by going to Menu > Warehouses > [Select Warehouse] > Inventory [tab] > [Select Inventory] > Menu > Save to XLS or PDF.
2. Accounting. As it relates to reviewing the value of the product at the Warehouse, Gimme allows inventories to be started on one date, and then reviewed or finished on a later date.
It is important not to run a warehouse value report in between the inventory start date and the date it is completed in VMS because not all the changes may be reflected in the report.
Confirm that the warehouse inventory is complete in VMS by viewing the Warehouse screen. Next to the Inventory tab, if you see Active Inventory highlighted in yellow, the inventory has not been reviewed and completed in VMS. If you do not see the yellow Active Inventory tab, you may view warehouse inventory related reports. Note that if your operation has more than one warehouse, confirm all warehouses have completed the inventory in VMS before viewing data for all warehouses.