📌 What is the Cost of Goods Sold (CoGs)?

📌 How do I read the CoGs table?

📌 Real case | Example

📌 Recommendations for efficient use of CoGs

📌 Frequently asked questions about CoGs

Cost of Goods Sold (CoGs) lets you see how much stock left your storeroom during a period and compare it with the amount explained by your POS sales and recorded waste.

The table shows one row per product, even when that product belongs to several inventories. This helps you spot variances and see how each figure was calculated in a single view. This row can be expanded to show individual inventories' quantities.

What is the Cost of Goods Sold (CoGs)?

CoGs calculates the consumption of each product using:

• The opening inventory.
• The purchases made during the period.
• The closing inventory.

The formula is:

Opening inventory + Purchases − Closing inventory = Consumed

haddock then compares consumption with POS sales and recorded Waste:

POS sales + Waste − Consumed = Variance

💡 Waste is not subtracted from Consumed, because the closing count already reflects the product that was lost. It is added to sales to explain part of what left the storeroom.

How do I read the CoGs table?

Each row represents one product. Every metric shows the quantity in the product's unit of measure—for example, kg, L, or units—and its monetary value.

1. Variance

This is the part of consumption that is not explained by POS sales or recorded waste.

• A negative variance means more product left the storeroom than sales and waste explain. It may point to breakage, theft, complimentary items, over-portioning, or missing records.
• A positive variance means the POS reflects more consumption than the counts and purchases show. Check whether a product is missing from an inventory or a purchase has not been recorded.

The monetary amount is valued using a quantity-weighted average of the product prices recorded in the opening and closing inventory counts.

2. Opening and closing inventory

haddock starts from the latest available count for each product and applies the movements needed to reach the beginning or end of the period.

Each figure has a label:

• Counted: there were no purchases, sales, or waste entries between the count used and the period boundary. The figure matches the count.
• Estimated: at least one purchase, sale, or waste entry occurred after the latest count. haddock starts from that count and applies the movements up to the period boundary.

💡 An Estimated figure depends on all purchases, sales, and waste after the count being recorded.

Expand the product row to see how much was counted in each inventory and on which date. Purchases and sales belong to the restaurant as a whole, so they are not split between inventories.

3. Purchases

This column contains purchases from the period converted to the product's unit of measure. For example, if you buy a case of 12 bottles, you will see 12 bottles.

To avoid counting a purchase twice, only one document is used per supplier and product: if the invoice has arrived, haddock uses the invoice; until then, it uses the delivery note.

The amount is the purchased quantity multiplied by a quantity-weighted average of the product prices recorded in the opening and closing inventory counts; it is not the purchase document total.

4. Consumed

This is what left the storeroom according to inventories and purchases:

Opening inventory + Purchases − Closing inventory

This figure includes product recorded as waste because it was no longer available when the closing count was taken.

5. POS sales

This shows how much product was sold through your POS during the period.

haddock breaks down each sold item through its recipe costing to calculate how much of every product it consumed. If a POS item is not linked to a recipe costing, its sales will not reach this column.

6. Waste

This shows the waste recorded for the product during the period: expiration, breakage, personal consumption, or theft.

If you record waste for a dish, haddock distributes it among its ingredients according to the recipe costing. Waste recorded before the start of the period does not appear in this column if it was already included when estimating the opening inventory.

Real case | Example

Suppose you analyze olive oil from February 1 to February 28 and the product's unit of measure is liters:

• Opening inventory: 100 L
• Purchases: 50 L
• Closing inventory: 60 L
• POS sales: 82 L
• Recorded waste: 3 L

1. Consumed

100 L + 50 L − 60 L = 90 L consumed

2. Variance

82 L + 3 L − 90 L = −5 L variance

Waste explains 3 of the 90 liters consumed. The remaining 5 liters are not explained by sales or recorded waste, so you should review the counts, purchases, recipe costings, and unrecorded losses.

Recommendations for efficient use of CoGs

• Take physical inventories regularly. The closer the counts are to the beginning and end of the period, the fewer movements haddock needs to apply. Also try to count the location's different inventories on nearby dates. The further apart they are, the more movements haddock must apply to compare their counts.
• Record every purchase. Check that no invoices or delivery notes are missing and that purchase conversions are correct.
• Keep recipe costings linked to the POS. A sale without a recipe costing cannot be converted into product consumption.
• Record waste when it happens. This separates known losses from unexplained variance.
• Check units of measure. Purchases, inventories, sales, and waste are converted to the unit configured for each product.
• Expand rows when a figure needs reviewing. The breakdown shows what was counted in each inventory and when.

❓ Frequently asked questions about CoGs

Q: Why does the opening or closing inventory show as Estimated?
A: Because purchases, sales, or waste occurred after the latest count. haddock applies those movements to calculate the figure on the selected date.

Q: What does Counted mean?
A: It means there were no purchases, sales, or waste entries between the count used and the period boundary, so the figure matches the count.

Q: Why is there only one row when the product is in several inventories?
A: CoGs groups the product into one row. Expand it to see the count and date for each inventory.

Q: Why are purchases and sales not split by inventory?
A: Because they belong to the restaurant as a whole. The inventory breakdown shows counts rather than an estimated allocation of those movements.

Q: Does waste reduce the Consumed figure?
A: No. Waste is already part of what left the storeroom. It is added to POS sales to explain consumption and calculate variance.

Q: Why are sales missing for a product?
A: Check that you have an integrated POS and that its items are linked to recipe costings that use the product.

Q: How can I improve the accuracy of the calculation?
A: Take frequent physical counts, record every purchase and waste entry, and keep recipe costings and their POS links up to date.

💡 You may also want to read how to create a physical inventory and how to record inventory waste.

Updated on: 06/08/2026