The COGS (Cost of Goods Sold) allows you to calculate the obtained profit / loss based on the purchase price of a product. By activating this feature, you can access the Profit and Loss Reports to review the profit / loss for each sale or product.

To set up the HPP settings feature, please click the Settings menu and then the General sub-menu then navigate to the Business Settings panel.

After you activate the Enable Automatic Costing, then you can choose the desired costing tracking method for your store's needs. iSeller has provided 3 type of costing tracking Methods namely First In First Out (FIFO), Last In First Out (LIFO), and Average.

First In First Out (FIFO)

This method allows the recording of Profit & Loss Reports using the purchase price of the first purchased product. If you choose the First In First Out (FIFO) recording method, the Purchase Price will appear using the FIFO method on the Profit & Loss Reports.

Example: Sambal brand ABC is bought as many as 2 bottles for Rp 10,000 per bottle. Then the same product is 3 bottles for Rp. 15,000 per bottle. 3 sales are recorded for Rp 20,000 per bottle, so the profit made is Rp. 25,000 calculated from 2 x (Rp. 20,000 - Rp. 10,000) + 1 x (Rp. 20,000 - Rp. 15,000).

Last In First Out (LIFO)

This method allows the recording of Profit & Loss Reports using the purchase price of the last purchased product. If you choose the Last In First Out (LIFO) recording method, the Purchase Price will appear using the LIFO method on the Profit & Loss Reports.

Example: Sambal brand ABC is bought as many as 2 bottles for Rp 10,000 per bottle. Then the same product is 3 bottles for Rp. 15,000 per bottle. It is recorded that the sale is 3 pieces at the price of Rp. 20,000 per bottle, so the profit made is Rp. 15,000 calculated from 3 x (Rp. 20,000 - Rp. 15,000).

Average

This method allows the recording of Profit & Loss Reports to use an average of all product purchase prices. If you choose the Average recording method then the Purchase Price will appear using the Average (AVG) method on the Profit & Loss Reports.

Example: Sambal brand ABC is bought as many as 2 bottles for Rp 10,000 per bottle. Then the same product is 3 bottles for Rp. 15,000 per bottle. 3 sales are recorded for Rp 20,000 per bottle, so the profit made is Rp 39,000 calculated from 3 x (((2 x Rp 10,000) + (3 x Rp 15,000)) / 5).

Buying Price Settings

If you enable profit and loss recording, you can add the Buying Price the first time you add a product.

After you have successfully added a product, the Buying Price that you have added cannot be changed again to prevent changes in the buying price that has been set.

The buying price will be automatically changed when you make additional stock using the Transfer In iSeller feature. To learn more about Transfer In, please read the article Importing Goods from Suppliers (Transfer In).

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