Home>Items and inventory

Set unit costs for purchase orders

Who is this article for?
  • Sellers with general items and inventory permissions. Set permissions in the Square Dashboard.
  • Square for Retail Plus, and Premium subscribers.
  • Square for Restaurants Plus, and Premium subscribers.
  • About setting unit costs for purchase orders

    Unit cost is the cost incurred to produce, purchase, or acquire a single unit of a product or service. It includes all relevant costs, such as materials, labor, and overhead. You can add unit costs to your item catalog in Square to produce more detailed reports with COGS (Cost of Goods Sold), and better calculate your margins.

    Before you begin

    There are three ways to add your unit costs:

    Tracking stock and including a unit cost for item variations will ensure your reporting going forward will accurately reflect your cost of goods sold, profit, and profit margin; however, to correct your historical stock adjustments, go to your History log on your Square Dashboard.

    Stock adjustments that deduct from your inventory levels will credit or debit your COGS and Inventory Value (depending on the type of adjustment) based on a first in, first out (FIFO) accounting method. If the cost appears to be inaccurate, you can edit the cost of the original stock intake. As a result, you are unable to update the unit costs for adjustments that deduct from your stock levels — such as re-counts that adjust down, loss, damage, or theft stock adjustments. Learn more about Square inventory management.

    If an item is missing a unit cost, you’ll need to update each variation from your item library before you can bulk resolve missing costs from your History log.

    Set up unit costs

    1. Sign in to your Square Dashboard and click Items & orders > Items > Item library.

    2. Search and select an inventory item to adjust.

    3. Scroll down to Variations, then click Receive stock.

    4. Choose a location to adjust its inventory under Manage stock.

    5. Click Stock received next to Stock action.

    6. Enter the stock quantity, vendor name (optional), and the unit cost.

    7. Configure any other variation setting, then click Done.

    Bulk edit unit cost for variations

    1. Sign in to your Square Dashboard and click Items & orders > Items > Item library.

    2. Select the relevant items, then click Edit items.

    3. Scroll to Unit cost and enter the new unit costs.

    4. Click Update variations.

    Update missing unit costs and quantity

    Step 1: Identify missing unit costs

    1. Sign in to your Square Dashboard and click Items & orders > Items > Inventory Management > History.

    2. Select Missing Cost from the All Costs drop-down menu.

    The Missing Cost filter will display a list of items that are not associated with a unit cost.

    Step 2: Add a unit cost

    1. Sign in to your Square Dashboard and click Items & orders > Items > Item library.

    2. Click Add Cost next to one of your items, or select your item > Edit.

    3. Enter the unit cost > click Save.

    If the original stock intake was with a purchase order, click the link listed in the historical adjustment details page to update the associated unit cost.

    Step 3: Bulk resolve missing unit costs

    1. Sign to your Square Dashboard and click Items & orders > Items > Item library to confirm each item variation has an associated unit cost.

    2. Go to Inventory Management and click History.

    3. Click Resolve Unit Costs > Resolve Costs. You can also select See Stock Actions to see each historical adjustment missing an associated unit cost.

    For items with a cost associated at the variation level, you’ll see the option to Resolve Unit Costs for adjustments in the History tab of your Square Dashboard.

    If an item in your library is missing a unit cost, you’ll need to update each variation before you can bulk resolve missing costs from your History log.

    Related articles