With the end of our second financial year, I just spent my entire Sunday calculating Cost of Goods Sold (COGS) for Harvestcare. What a chore! Despite having a financial system in place, it’s still a huge burden. Luckily, I have a solid cost accounting background. Other businesses tell me they use spreadsheets too.
Last year I did a full review of all the available financial systems and none of them could properly calculate COGS for a small manufacturer. I even verified this with my tax accountant. It doesn’t exist.
I could have added a complicated manufacturing plug-in for Xero, but it was completely overkill for what I needed, especially at its monthly price.
I can’t handle this amount of manual work each year. So, I plan to build a database for calculating Cost of Goods Sold and keeping track of inventory since there is nothing available.
Who knows… maybe by doing so I can solve a problem for other small manufacturers too. After all, how do they even know how much their products cost to make if they don’t know cost accounting?