Disclaimer: Inventory Management, costs, and COGS posting are complicated and can vary greatly depending on your individual business needs. If you’d like assistance with finding your best configuration, we’d recommend speaking with an inventory specialist, such as an integrator or an ecommerce accountant. The information in this article is designed to be a guide and we recommend speaking to an expert about your specific configuration.
Overview
If you’ve been using A2X’s COGS feature, you might know the process of calculating your costs externally and keeping these up to date in A2X. In the past, you would’ve had to manually copy and paste your costs into A2X or use a spreadsheet as an intermediate way of importing them.
Alternatively, you might be sending your COGS directly to your GL from Finale, but you’ve noticed that these costs don’t always align with your sales entries.
Whichever method you were using, we have some great news set to save you time and automate your processes.
A2X now integrates with Finale, meaning you can use Finale to calculate your costs and then import these directly into A2X. This means A2X will post your COGS at the same time as your sales entry, to ensure your numbers line up.
Understanding the role of each system:
A2X’s primary focus is syncing sales and fees from sales channels and calculating SKUs and quantities sold. It doesn't track or manage inventory, however, A2X does have a COGS feature that allows you to post your COGS to your GL alongside your sales entry.
Finale Inventory handles the inventory management aspect, including the costs associated with each SKU. Finale will sync these costs to A2X, which will then calculate COGS based on the provided cost data.
If there is anything we know about COGS, it’s that there isn’t a one-size-fits-all approach. So here we’ve listed some integration options and some key considerations so that you can find the method that works best for you.
What is the optimal configuration for A2X and Finale?
With A2X & Finale you have two options for configuration:
Option one: Integrate Finale with A2X so that A2X posts COGS to your GL, based on the average cost pulled from Finale
Key considerations
A2X will posts COGS for exactly the same orders in the sales posting
This process is generally easier to understand & reconcile, as the majority of the data posted to your GL is coming from one integration (A2X)
This also make reporting in the GL easier
However, these COGS entries will be based on average costs rather than landed costs
Option two: Have A2X post your sales data, but don’t integrate Finale with A2X, meaning Finale will post your COGS to GL based on landed cost
Key considerations
It’s likely these entries will be more financially accurate because they’re using landed costs.
However, this process can create inaccuracies between the orders in the sales entries and the orders in the COGS entries due to differences between when the orders are paid out and when they are fulfilled
Finale does not support Xero
Reporting in the GL is harder, for example, because you won’t be able to split the data by brand, tracking category, or other desired groupings.
Based on these considerations, we encourage you to decide which integration option will best suit your business. If you’d like help making this decision, you can always find an expert accountant or bookkeeper in our ecommerce directory.
If you decide to use the A2X and Finale integration, here is an overview of the integration:
Finale - A2X Average Cost Integration - How the integration works
When you have Finale integrated with A2X, A2X will automatically import the average cost and SKUs from Finale on a daily basis. These costs will then be used to calculate your COGS entries. Your COGS entries will be posted to your GL as the same time as your sales entries. The frequency of the entries will depend on the frequency of your payouts/settlements from your sales channel. For example, if you sell on Amazon, A2X will prepare a settlement every two weeks (meaning your sales and COGS will be posted to your GL every two weeks). If you sell on Shopify, it’s likely to be more regular than this.
The COGS entry will debit your inventory asset account and credit your COGS expense account.
If you have any questions regarding A2X’s configuration, our Customer Success team are happy to help.
If you have questions about the configuration for Finale, we recommend you contact their support team or visit their support center.