V8 - Tracking overhead costs

Many companies track overhead as part of their manufacturing and/or inventory management. In doing so, the utilities and other overhead costs become part of the costs of goods sold as opposed to expense items on your profit and loss statement. SOS Inventory supports two approaches to tracking overhead. Both methods are available only on the Pro plan.

• Overhead items. You can create an item to represent an overhead expense by selecting the Type field option Overhead. Typically, you set up the overhead item with the expense account set to a current liability account in QuickBooks Online. As you enter builds and process transactions, you enter the overhead items as inputs to the transactions. The cost allocated to overhead is posted to the liability account. When the actual bills come in and are paid via QuickBooks Online, the bill is posted to the liability account, which will ultimately relieve the balance in that account. The net result overall is that your overhead costs become part of the cost of the output items in the manufacturing runs in SOS, which then turns into cost of goods sold upon sale.
   
• Item receipts. When goods are received, you can enter a percentage cost for overhead. This tells SOS Inventory to add that percentage to each item in the item receipt. The value of the item, including the overhead, can be viewed in that item's transaction history.