V9 - 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 input items for manufactured goods. 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 build 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.
   
• Other cost items on item receipts. When goods are received, you can enter overhead items in the Other costs section of the item receipt. Like all Other cost items, an overhead item is included in the landed cost calculation for items received. The value of a received item with its landed cost can be viewed in that item's transaction history. Although the overhead item is an expense item, its expense account must be Inventory asset.