Disclaimer: Inventory management, costs, and COGS posting can be complex and may vary greatly depending on your specific business needs. If you need assistance in finding the best configuration, we recommend consulting an inventory specialist, such as an integrator or an ecommerce accountant. The information in this article is designed as a guide, and we advise speaking with an expert about your specific setup.
Cin7 offers two robust Inventory Management Systems: Cin7 Omni (the original Cin7 solution) and Cin7 Core (formerly Dear Inventory).
This article explains how to use A2X with Cin7 Core. Click here for the support article on using A2X with Cin7 Omni.
Many sellers use A2X alongside an Inventory Management System (IMS).
What is the difference between an Inventory Management System and A2X?
An IMS is designed to track, manage, and optimize physical stock levels, handling tasks like ordering, storing, and selling inventory. Typical IMS tasks include:
Creating and managing purchase orders.
Acting as the trusted source for buy & landed costs.
Receiving inventory and managing orders.
Dynamically updating inventory quantities on sales channels, including handling bundles.
A2X, on the other hand, specializes in ecommerce accounting. It captures and summarizes financial transactions from eCommerce platforms and marketplaces, handling the complexities of ecommerce sales, including:
Managing multiple payment processors.
Handling various currencies and payment periods.
Ensuring financial entries match bank deposits for accurate reconciliation.
What is the optimal configuration for A2X and Cin7 Core?
Option one - If you’re using QuickBooks:
Connect both A2X and Cin7 Core to QuickBooks. In this setup:
A2X will post your sales entries.
Cin7 Core will post your COGS entries.
Key considerations
You need to configure Cin7 Core to not post sales (turn off 'Sales Posting' in the settings).
A2X’s posting frequency depends on the channel (e.g., Amazon settlements are bi-weekly; Shopify postings may be daily or every few days).
If Cin7 posts your COGS more frequently than A2X posts your sales, your margins will be skewed in your accounting software until A2X posts the sales entry.
There could be discrepancies between the orders accounted for by A2X and the IMS (e.g., IMS might post at the fulfillment date, while A2X posts at the payment date).
Option one - If you’re using Xero:
When using Cin7 Core with Xero, you cannot switch off sales posting while leaving COGS posting on. You can only choose to post both COGS and sales, or neither. Cin7 Core may add this functionality in the future, but there is no confirmed date. Due to this limitation, you will likely need to use Option Two.
Option two: Use Cin7 Core for cost calculations and import these costs into A2X. A2X will then post both COGS and sales entries.
Key considerations
Configure Cin7 Core to not post sales or COGS ('Sales Posting' and 'COGS Posting' will be switched off in the settings).
In your A2X settings, enable COGS.
A2X will post both COGS and sales entries at the same time.
COGS and sales entries will match, accounting for the same orders.
This method is more manual, requiring exporting and importing costs.
A2X’s COGS entries use average cost, not FIFO or LIFO.
A2X currently does not capture reimbursements or returns in the COGS entries.
The posting frequency of A2X entries depends on the sales channel (e.g., Amazon settlements are bi-weekly; Shopify postings may be daily or every few days).
Option three: Have Cin7 Core and A2X both post sales entries to your GL, and use clearing accounts to avoid duplication of entries.
Key considerations
A2X sales entries are designed to reconcile with your sales channel payouts, often providing more accuracy and detail than general sales entries.
If you want to capture accurate sales entries from A2X while having Cin7 Core post COGS entries, ensure you avoid duplicating sales data from both Cin7 Core and A2X.
A useful approach is to map any transactions that both A2X and Cin7 Core post. You can post one set of sales entries to a sales account (e.g., A2X) and the duplicate set (e.g., Cin7 Core) to a clearing account. This prevents inflating your sales figures.
How to Enable or Disable COGS in A2X
To enable or disable COGS in A2X:
Go to Settings > COGS.
Select Enable COGS or Disable COGS, depending on your setup.
COGS is available on all A2X plans, except mini plans. Click here to find out more about how A2X COGS works.
If you have any questions regarding A2X’s configuration, please reach out to our Customer Success team via the blue chat icon in the bottom right of your screen, or via contact@a2xaccounting.com.
If you have questions about the configuration for Cin7 Core, we recommend you contact their support team or visit their support center.