Cost of Goods Sold (COGS) tracking is a feature in Link My Books that lets you track the cost of the units sold during each settlement period. This helps ensure that your financial reports in Xero or QuickBooks accurately reflect inventory costs as products are sold.
In This Guide:
How the COGS Feature Works
Once enabled, Link My Books will automatically calculate the total value of products sold in each payout by using the landed product costs you’ve entered on the Product Costs page.
Please visit these help articles for further options on how to add your Product Costs;
Here’s how it works:
For each payout, we generate a list of SKUs sold.
We calculate the total cost of those items using your entered unit costs.
We then create a COGS bill that moves the inventory value from your Inventory Asset account to your COGS (Direct Costs) account.
In Xero that would look something like this:
Let's break down the lines of the above bill for clarity.
Line 1 - "Inventory Deduction From Fulfilment by Amazon (FBA)" is the COGS figure being deducted from an asset account, in this case, "Amazon Inventory".
Line 2 - "Cost of Goods Sold Fulfilment by Amazon (FBA)" is the COGS figure being added to a direct costs account, in this case, "Amazon Cost Of Goods Sold".
The bill will always balance to zero. We are simply moving value between accounts to reflect inventory movement as cost.
How to Set Up and Turn On COGS
Step 1: Enter Your Product Costs
Go to the Product Costs page in Link My Books. You can enter product costs directly into the table;
or use the bulk upload option for faster entry;
What to Include in Landed Cost:
This depends on how you account for inventory in your bookkeeping software:
Option A: You include all landed costs in your inventory asset account
Include:
Supplier product cost
Shipping to FBA or your warehouse
Import duty
Example:
Product cost: £5.50
Shipping: £0.18
Import duty: £0.40
Total landed cost to enter: £6.08
Option B: You only include supplier cost in your inventory asset account
Only enter the product cost from the supplier.
In this case: £5.50
📝 Tip: Match your Link My Books product cost values to your accounting method in Xero or QuickBooks.
Step 2: Turn On COGS & Select Accounts
Head to the Settlement Settings page and toggle on COGS. You’ll then be prompted to:
Select your Inventory (credit) account – where product costs are deducted from
Select your COGS (debit) account – where costs are added as items are sold
If you don’t have these accounts set up yet, Link My Books can create default accounts for you.
🛒 Amazon Users: You’ll set different accounts for each fulfilment type (FBA, FBM, Non-Amazon Orders).
🛍️ eBay, Shopify, and Etsy Users: You’ll only need to set one inventory and one COGS account.
You can also choose which COGS sources to include (e.g. exclude Non-Amazon orders if needed);
Once set up, settlements not yet sent will be refreshed automatically. For those already sent, you’ll need to roll back and resend to apply COGS;
Cost of Goods Sold in Analytics Only
For users who wish to keep their Cost of Goods Sold (COGS) data separate from their primary accounting software, we offer an "Analytics Only COGS" option.
When this setting is enabled, all your COGS details will be visible and accessible within the dedicated analytics section of our application. Either within the settlement details;
Or directly within the Analytics tab;
This allows you to gain valuable insights into your product profitability and cost management directly within our platform.
Crucially, selecting this option means that your COGS data will not be posted to Xero or QuickBooks alongside your other settlement information. This provides flexibility for businesses that prefer to manage COGS internally or through other means, while still benefiting from the analytical capabilities of our system.
Once changes are made, all settlements that haven't been sent will automatically be refreshed. Any settlements that have been sent will need to be rolled back and resent with the new adjusted COGS details.
👉Tip: For eBay, Shopify & Etsy accounts you will only need to set one credit and debit account:
Once you complete the 2 steps above we will refresh all of your settlements (excluding ones that have already been sent to Xero/QuickBooks) and you will see a new COGS tab on the view settlement pages, as shown below:
If you expand open a COGS bill you can check that the landed cost of each product SKU is accurate and update it if needed as shown below.
If you need to change the currency of your landed costs or want to update all of your products in bulk you can do so from the Product Costs page.
Once COGS is turned on, we will from then on send both the Sales & Fees Invoice and the COGS Bill to Xero/QuickBooks when you click Send Settlement.
Managing SKUs: Manual Creation, Hiding, and Date Filters
Link My Books automatically detects SKUs based on your settlement data, but we also provide extra tools to help you manage your SKUs more precisely — especially for handling inactive, future, or yet-to-be-detected SKUs.
👁️ Hiding Old or Inactive SKUs
You can hide SKUs from your active SKU list if they're no longer in use — for example, if you're no longer selling a particular product.
🔧 Manually Creating SKUs
If you want to prepare for new product launches or set rules for SKUs that haven’t yet appeared in settlement data, you can enable the 'Allow SKU Creation' toggle which will allow you to set VAT rates before the first sale comes in.
If you have any questions about this article or feedback on how we could make it better please reach out to the support team via the blue chat icon on the bottom right of the page or via email to [email protected].