COGS and multi-location inventory

Tracking cost of goods sold and inventory across multiple locations accurately.

Accurate COGS and inventory tracking is critical for true profitability visibility. Here’s how different integration methods handle it.

Why it matters

• COGS determines your actual profit (not just revenue)
• Inventory quantities prevent overselling and stockouts
• Multi-location tracking shows where products are physically stored
• Landed costs (shipping, duties, fees) impact true product cost

Manual CSV challenges

COGS tracking:

• Must manually calculate cost for each order line item
• No automatic COGS posting when orders ship
• Easy to miss product cost updates

Inventory:

• Shopify inventory ≠ QuickBooks inventory (they drift apart)
• Manual CSV can’t sync quantities back to Shopify
• Multi-location tracking requires separate spreadsheets

Result: Inaccurate profit margins and inventory discrepancies.

No-code connector limitations

COGS:

• Zapier doesn’t automatically calculate COGS per line item
• Would need custom logic to look up product costs
• Can’t handle average costing or FIFO methods

Inventory:

• Can create inventory items, but quantity sync is unreliable
• No multi-location support in standard connectors
• Assembly/bundle COGS calculations are impossible

Result: Works for revenue tracking, fails for true accounting.

Accounting-grade app solution

Apps like Webgility handle COGS and inventory automatically:

COGS posting:

• Automatically calculates COGS for each order line item
• Posts COGS entries when orders ship (not when they’re placed)
• Supports average cost, FIFO, and specific identification methods
• Handles bundle/kit COGS (sum of component costs)

Multi-location inventory:

• Syncs quantities bidirectionally (Shopify ↔ QuickBooks)
• Tracks inventory by location (warehouse, retail stores, etc.)
• Updates both systems when inventory moves or sells
• Prevents overselling by keeping quantities in sync

Landed costs:

• Can allocate shipping, duties, and fees to product costs
• Updates average costs when new inventory arrives
• Handles currency conversion for international purchases

Multi-location example

You have:

• Warehouse A: 100 units of Product X
• Retail Store B: 25 units of Product X
• Shopify shows: 125 total available

When an order ships from Warehouse A:

1. App reduces Warehouse A quantity by 1 in QuickBooks
2. App syncs updated quantity to Shopify (99 remaining at Warehouse A)
3. App posts COGS entry using Warehouse A’s cost basis
4. Both systems stay in sync

When you need this

✅ Use accounting-grade app if:

• You track true profit margins, not just revenue
• You have inventory in multiple locations
• Your accountant needs accurate COGS for financial statements
• You sell bundles or kits with component costs

❌ Manual/connectors might work if:

• You’re dropshipping (no inventory tracking needed)
• You only track revenue, not profitability
• You have a single location and low SKU count

Bottom line

COGS and multi-location inventory are where DIY methods fail. If accurate profitability and inventory are important to your business, use an accounting-grade app from day one.