Should I use the Cost of Goods Sold integration option?

Lightspeed Accounting can integrate these COGS with your accounting system.

However, if you are not doing Inventory Accounting in your accounting system, you would not want to enable COGS accounting in Lightspeed Accounting.

What is Inventory Accounting?

Inventory Accounting involves classifying all of the products you purchase for resale as an Asset on your Balance Sheet rather than posting all of your purchases directly to a COGS Account. Using this approach allows you to defer costing the purchases until the date you actually sell the product. For example, you recognize the cost on your Income Statement on the date on which you Sell the product as opposed to on the date on which you Purchase the product - thus providing you with a more accurate reflection of your operating margins.

In some cases (a Quick Service Restaurant for example), your Inventory (or the products you purchase) may be bought and sold within such a short time window, you may not care about the above matching principle and will simply post your vendor purchases directly to a COGS account rather than to an Inventory Asset account. If you are posting purchases directly to COGS, do not enable the Lightspeed Accounting COGS accounting option. 

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