How is Cost of Goods in inventory calculated each month?

[jbpr]

My goal is to track (and be able to explain) a current Cost of Goods in Inventory monthly.  I need to be able to document to my Board, how the Cost of Goods in Inventory varies each month and why.

I can get a number from Square that purports to be that. When I start with the end of month Cost of Goods in Inventory, then for the next month, subtract the Cost of Goods Sold and add the Cost of Goods purchased, I do not get the number reported by Square as Cost of Goods in Inventory for the following month.

What is the formula if not LastMonthValue - Sold + Purchased?

[frances_a]

Hello @jbpr 👋

Took a bit of digging, but the basic formula can be found here. 

Beginning Inventory + Purchases – Ending Inventory = Cost of Goods Sold

The COGS report includes sales, restocks, re-counts, losses, damages, and theft.

Additionally, the COGS column will account for additional costs (such as tax and shipping) associated with the order. For example, when you receive a purchase order, you can choose to include shipping and handling by selecting Add Optional Fee once the order is received. Including additional costs when receiving an order will increase visibility into your profit margin.

Let me know if this helps clarify how that number is calculated. 

Thank you.