Every item carries two accounts that decide where it lands in your books: an Income Account, which its sales are credited to, and a COGS Account (cost of goods sold), which the cost of the units sold is charged to. Leave them empty and the item uses your company's own sales and cost of goods sold accounts. Set them when you want your Profit & Loss to split income or cost by product line, for example Food Sales and Beverage Sales, or Parts and Labour.
The third account every stocked item touches, the inventory asset account that holds the value of the stock on your shelves, is one account for the whole company. It is chosen in Accounting Setup, not on the item.
Where to set them
There are two places, and both save the same two settings.
From the item's window
- Open the Item List (Lists ▸ Item List) and double-click the item, or press Ctrl+Shift+I and pick it.
- Click Accounts…. The Accounts · *item* window opens.
- Set Income Account and COGS Account as described below, then click Close.
From the Edit Product page
- Open the item's window and click Edit Item.
- The ACCOUNTS section sits under Tax rate. Set the two accounts there.
Each account is saved as soon as you pick it. You do not need to click Save Changes for the accounts; the message Item accounts saved — sales from now on post to them. confirms it.
The fields
| Field | What to enter / what it means |
|---|---|
| Income Account | Where sales of this item post. Click the box and type part of an account's name or number to find it. Income accounts are listed first. Empty (the box reads The company's own account) means sales post to the Sales revenue account in Accounting Setup. |
| COGS Account | Where the cost of this item posts when it sells. Expense and cost of goods sold accounts are listed first. Empty means the Cost of goods sold account in Accounting Setup. |
| × (beside an account) | Use the company's own account: clears the item's own account so it goes back to the company default. |
Accounts show as their number and name (for example 4010 · Food Sales) when your chart of accounts uses numbers. To add a new account first, see Add, edit, merge or make an account inactive.
When the change takes effect
Like a QuickBooks preference, an item's accounts affect entries from now on. Invoices, credit memos and returns saved after you change the account post to the new one; entries already in the books stay where they are. If you need past sales moved, make a General Journal Entry or ask your accountant.
What posts where
For an item with its own accounts, SeroBooks posts as follows. Anything not set on the item uses the company account named in brackets, from Accounting Setup.
| Transaction | Debit | Credit |
|---|---|---|
| Bill or Receive Items for the item | Inventory (Inventory on hand) for the cost before tax | Accounts Payable, or the bank or card you paid from |
| Invoice or Sales Receipt — the sale | Accounts Receivable, or the bank / Undeposited Funds | The item's Income Account (Sales revenue) |
| Invoice or Sales Receipt — the cost | The item's COGS Account (Cost of goods sold) | Inventory (Inventory on hand) |
| Credit memo / return from a customer | The item's Income Account (or Sales returns) | Accounts Receivable or the refund account |
| Stock coming back on a customer return | Inventory | The item's COGS Account |
| Adjust Quantity/Value on Hand (stock written off) | Damage / shrinkage write-offs | Inventory |
Points to know:
- An invoice with several items splits its income across each item's Income Account, in proportion to each line's value. Lines whose item has no Income Account go to the company's sales account. The cost splits the same way across COGS Accounts.
- Classes are kept. When invoice lines carry a class, the split by item account is also done by class, so Profit & Loss by Class still adds up.
- The cost of a sale is what the units sold actually cost on the bills they came in on, plus any freight, duty or brokerage applied to those bills as landed costs. The item's Cost field is used only when no bill cost exists.
- Tax, shipping and discounts on an invoice do not go to the item's account. They post to the company's sales tax, shipping and discount accounts.
- Services have no stock, so a sale posts income but no cost of goods sold. A service bought on a bill posts to the expense account you choose on the bill line. See Services.
For every transaction type, see How each transaction posts to the books.
Permissions
- Seeing an item's accounts needs access to the Products screen (Inventory ▸ Products).
- Changing them needs the Edit Product right. Without it SeroBooks refuses the change.
See Roles and permissions explained.
Common problems
"That account is not in this company's chart of accounts." The account was deleted or belongs to another company. Pick another account, or clear the field with ×.
"Item accounts arrive with the next server update." Your company's server has not been updated for item accounts yet. The item uses the company accounts until then; try again later.
"That item no longer exists." The item was deleted or merged on another computer. Close the window and click Refresh on the Item List.
I changed the Income Account but last month's Profit & Loss has not changed. That is expected: the change applies to entries saved from now on.
My inventory asset account is wrong. It is set once for the company. Change Inventory on hand in Accounting Setup, and talk to your accountant first if stock has already been posted to the old account.