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Cost of Goods Sold (COGS), also called Cost of Sales, refers to the direct costs of producing the goods sold by a restaurant over a period of time. This differs from total purchases in a few ways:
  • This amount also includes products on hand that were used even if they were not purchased in the period.
  • This does not include products purchased during the period which were not used but remain in inventory.
  • This does not include general operating expenses of a restaurant not directly associated with specific sales.
Cost of Goods Sold is a specific type of account in a restaurant’s general ledger, and its value can be calculated as follows: Cost of Goods Sold = Starting Inventory + Purchases - Ending Inventory This might be more easily expressed as: Cost of Goods Sold = Purchases + (Starting Inventory - Ending Inventory) Or even more simply: COGS = Purchases + Inventory Adjustments

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What is the difference between COGS and expenses?

Cost of Goods Sold is the direct cost required to produce any sales in a particular period. Expenses (also called Operating Expenses or Indirect Expenses) are the general cost of operating a business that are not tied to a particular sale. Garde includes the Category Types Food, Beer, Wine, Liquor, NA Bev and Retail under COGS. Garde includes the Category Types Food, Beer, Wine, Liquor, NA Bev, and Retail under COGS. Read more about how the various reports in Garde break down your COGS here.