Dynamics Community Forum Thread Details

What setup do we need to do in BC to allow us to determine the COGS of a Sales Order or Posted SI?

Hi Community,

I hope to find some clues on this.

What setup do we need to do in Business Central first to allow us to determine the COGS of a Sales Order or Posted Sales Invoice?

My managers want to know how do we know the margins of the cost of every sales we made, and from there we can determine which sales persons has made the most profit margins.

Hope to have your advise.

Thank you.

Categories:

Dynamics 365 Business Central

To determine the COGS and profit margin for each Sales Order or Posted Sales Invoice in Business Central, there are several important setups and considerations.
1. Ensure Inventory Costing is Properly Configured
First, make sure your Items are set up correctly with an appropriate costing method such as:

FIFO
Average
Standard
Specific

This is configured on the Item Card under:

Costing Method
Unit Cost

Without proper item costing, BC cannot calculate accurate COGS.

2. Enable Expected Cost Posting (Recommended)
Go to:
Inventory Setup

Enable Expected Cost Posting to G/L

This allows estimated COGS to appear even before purchase invoices are fully invoiced.

3. Automatic Cost Posting
In Inventory Setup, it is also recommended to enable:

Automatic Cost Posting
Automatic Cost Adjustment

This ensures item costs and COGS are updated automatically in the G/L.

4. Run Adjust Cost – Item Entries Regularly
To get accurate margins on posted sales documents, you must run:

Adjust Cost - Item Entries
Then post:
- Post Inventory Cost to G/L

This updates the actual cost on the sales entries and posted invoices.
Many companies schedule these jobs in the Job Queue.

5. Viewing Profit / Margin on Sales
Business Central can show profit information in several places:
On Sales Orders / Sales Invoices
You can personalize pages to show: