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BC - Cost of sold goods

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Posted on by RB-23031305-0

Hi,

So if there seems to be too much of a difference in the cost of sold goods account how would you go about to try to uncover why it is this way?

And when is the COGS recorded? For instance if you sell and buy at the same time it should be posted at the same time.

I did try to check the General Ledger Entries (archive) and filtering on the accounts but it is a bit time consuming if there are many transactions. Also I tried checking the settings for how COGS is set up.

Any input related to COGS in BC is appreciated :)

Kind regards

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Mansi Soni 8,907 Super User 2025 Season 2 on at

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Hello, If there’s a significant difference in the Cost of Goods Sold (COGS) account, the first step is to check the General Posting Setup and Inventory Posting Setup to ensure COGS is mapped correctly. The timing of COGS recognition is also crucial—it's usually recorded when inventory is sold and invoiced. However, if Expected Cost Posting is enabled, costs might be recognized at the time of shipment, which could cause discrepancies.

Another key factor is the costing method used (FIFO, LIFO, Average, or Standard). If costs aren’t properly adjusted or revalued, it may lead to inconsistencies. You can analyze this by reviewing Item Ledger Entries and matching them with G/L Entries. Running the "Cost Posted to G/L" report can also help identify mismatches.

If the issue persists, running the Adjust Cost - Item Entries batch job ensures all costs are correctly posted. Additionally, check if COGS is split across multiple accounts, such as for indirect costs like freight or handling. Instead of manually filtering transactions in General Ledger Entries, using Power BI or built-in Business Central reports can help streamline the analysis.

Hope this helps you!

Regards
Mansi Soni

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Jainam M. Kothari 15,639 Super User 2025 Season 2 on at

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Hello,

If in the Inventory Setup, "Automatic Cost Post to G/l" Boolean is True then COGS Account which is Mapped in General Posting Setup will be Posted by the System Automatically.

And if the Boolean is False, then User need to run 2 Batch jobs,
1. Adjust Item - Cost Entries

2. Post Cost to G/L.

After running above 2 batched the system will post the COGS Entry in the COGS Account.

May this can help : https://learn.microsoft.com/en-us/dynamics365/business-central/finance-how-to-post-inventory-costs-to-the-general-ledger

https://learn.microsoft.com/en-us/dynamics365/business-central/finance-posting-groups

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Ramesh Kumar 7,527 Super User 2025 Season 2 on at

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Hi,

The entries created are based on the master table setup. I recommend importing the entries into an Excel spreadsheet and reconciling them, as there may be a lot of duplicate entries. Additionally, please review the link below to better understand the setup and COGS

https://learn.microsoft.com/en-us/dynamics365/business-central/design-details-inventory-posting

https://valentincastravet.com/category/inventory/

Thanks

Ramesh

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YUN ZHU 95,597 Super User 2025 Season 2 on at

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It's not clear what your cost method is, I hope the following chart can give you some hints.

https://learn.microsoft.com/en-us/dynamics365/business-central/design-details-costing-methods?wt.mc_id=DX-MVP-5004336

Thanks

ZHU

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