Hi, how can I set up my inventory considering previous months purchases (I am starting the records on January 1, 2026) and updating it to reflect COGS per month?

In QuickBooks Online (QBO), COGS is only affected when you record sales using Inventory items. For purchase transactions, QBO only updates Quantity on Hand (QOH) and the Inventory Asset account, while COGS remains unaffected until a sale is made.

If inventory items were not used in previous transactions, you can still set them up now. Create the Inventory items first so QuickBooks can properly track QOH and COGS moving forward. Then, you may update past transactions by assigning the correct inventory items where needed.

Once updated, QuickBooks will automatically adjust:
 

• COGS for sales transactions
• QOH and Inventory Asset for both purchases and sales

This helps ensure your inventory and cost tracking are accurate moving forward from your start date.

For guidance on setting up inventory, please refer to this article: Set up and track your inventory in QuickBooks Online.

If you have any further questions or need assistance with QuickBooks, feel free to click the Reply button.