How to Use Square's COGS Report

Square's COGS report estimates product cost and margin from unit costs and recorded stock actions. To use it reliably, populate costs, receive inventory consistently, choose the report filter that matches the question, and investigate missing or unusual values before making pricing decisions.

Open the COGS report

In Square Dashboard, go to Reports > Inventory Reports > Cost of goods sold. Square's current COGS guide explains filters and how sales, returns, recounts, losses, damage, theft, and restocks affect the result. Availability depends on the Square product and plan.

Understand the filters

• All stock actions: a broad operational cost view including relevant adjustments.
• Sales: sales and returns without recount and loss effects.
• Sales and recounts: includes count corrections that can increase or decrease reported cost.
• Sales and losses: includes losses such as theft, damage, or downward recounts.

Choose one basis and label it. Do not compare a sales-only margin with an all-actions margin as if they were identical.

Populate unit costs

A sale with no cost cannot generate a complete product COGS result. Add a cost to each variation and review Inventory Management > History > Missing Cost. Square's missing-cost guide explains how to find and apply default costs.

Handle freight and order costs

Square notes that optional fees such as shipping and handling can be added when a purchase order is received. Decide whether to include them in landed cost and use the same policy across vendors and periods. Financial statements may require a specific accounting treatment; consult an accountant.

Why COGS changes after a recount

A downward recount indicates more stock left inventory than the ledger previously recorded and can increase the selected COGS view. An upward recount can reduce it. This is why large count variances must be investigated, not treated as harmless corrections.

Worked example

A shop sells 40 units at $25 each and assigns a $15 unit cost. Sales are $1,000 and sales-only COGS is $600, producing $400 gross profit and a 40% gross margin before operating expenses. If a recount records two additional lost units at the same cost, an all-actions view may include another $30 of cost.

Common problems

• Missing unit costs.
• Wrong cost on a case-versus-unit item.
• Receipts entered after the reporting period.
• Sales mapped to the wrong variation.
• Returns restored to stock inconsistently.
• Recounts hiding unrecorded waste or theft.
• Comparing Square operational COGS with an accountant's differently adjusted financial figure.

For formulas and product analysis, see GMROI and average inventory.

Where Stash fits

Square can handle the POS inventory action described above. Businesses that need a dedicated workflow for forecasting, purchasing, physical counts, ingredient-level tracking, or multi-location inventory can also connect Square with Stash for Square inventory management, which explains the combined workflow and when a dedicated inventory layer may make sense without replacing Square at checkout.

Frequently asked questions

Does Square calculate COGS?

Square offers COGS reporting in eligible inventory workflows, using item costs and recorded stock actions.

Why are some Square items missing COGS?

Check missing unit costs, variation mapping, receiving records, and report filters.

Does a recount affect COGS?

It can in report views that include recounts. Upward and downward adjustments affect the cost attributed to inventory movements.

Is Square COGS the same as tax-return COGS?

Not necessarily. Operational and financial statements may use adjustments or accounting policies beyond the app report. Reconcile with your accountant.

Related Square inventory guides

• Square Inventory Reports: What to Use and When
• Square Inventory for Retail Stores: Setup and Limits
• Square Inventory for Restaurants: What It Can Track

Last reviewed: August 8, 2026. Square menus, plan names, feature availability, and regional interfaces can change; confirm the current workflow in Square's official documentation.