Assigning costs to COGS - Pass-throughs

Summary

I am reading your instructions for above subject (June 2000 newsletter)which I found on your web site. Step 5 of this procedure concerns entering a bill, using the Expenses tab, charging Cost of Goods Sold (COGS) and assigning a customer name. When I do this (or any time I have assessed a charge to a COGS account) I find that 1. Costs remains on Unbilled Costs by Job Report and cannot be cleared. I consider this a loose end, untidy housekeeping. 2. If I did want to charge a customer, when I create an invoice or cash receipt, this amount is not listed in the Time/Costs window. 3. As no invoice icon appears on the bill/check, one is not able to "X" the invoice charge. Because of the reasons above, I avoid assigning any customer name to a COGS account on the expenses tab of a bill or check. I would like to know your thoughts on this.

Question

I am reading your instructions for above subject (June 2000 newsletter)which I found on your web site. Step 5 of this procedure concerns entering a bill, using the Expenses tab, charging Cost of Goods Sold (COGS) and assigning a customer name.

When I do this (or any time I have assessed a charge to a COGS account) I find that 1. Costs remains on Unbilled Costs by Job Report and cannot be cleared. I consider this a loose end, untidy housekeeping.

1. If I did want to charge a customer, when I create an invoice or cash receipt, this amount is not listed in the Time/Costs window.
2. As no invoice icon appears on the bill/check, one is not able to "X" the invoice charge.

Because of the reasons above, I avoid assigning any customer name to a COGS account on the expenses tab of a bill or check.

I would like to know your thoughts on this.

Answer

You're right. I consider this to be a bug in QuickBooks. When assigning amounts directly to a COGS account (using the expenses tab), you can tag the customer name, but you cannot tag it as a "pass through".

Since you cannot make it a pass-through, it shouldn't show on the Unbilled costs reports.

My solution for this is to create an Item that points to COGS and use that item instead of the Expenses tab. The item can be passed through just like all other expenses.

Start using items for these transactions and everything will work fine.