Integrations | How COGS Posting Works from LightSpeed to Xero

Rita Grima

Modified on: Tue, 15 Apr, 2025 at 10:04 AM

This article explains the process of how Cost of Goods Sold (COGS) is posted from LightSpeed to Xero. It's important to understand this process to ensure accurate financial reporting and reconciliation.

Background

When using the Evolution Platform, it is critical to close each register daily, including any service (field) outlets. Failing to close each register will prevent COGS from being recognized in Xero, which can lead to discrepancies in financial records and affect daily reconciliation and cash flow tracking.

Lightspeed does not post the COGS value to Xero for invoices/bills as they occur. Instead, it posts the total COGS movement when the registers are closed for the outlet. Note that vehicle registers will automatically re-open when Vital sends an invoice.

Register Closure Process

When you close the register in LightSpeed, three things are automatically posted to Xero:

Register close invoice - This updates the sales account and AR in Xero.
Register close bill - This will be posted across as a lump sum to COGS in the bill.
Payments received - These are linked to the close invoice and posted per payment type.

Examples of each of these are below.

LightSpeed Register Closure Reports

Summary

Detailed report

LightSpeed Register Closure Bill (COGS Recognition)

Xero Register Closure Invoice (Sales Recognition)

Xero Payments Received

Windcave - Linked to closure invoice

Cash

How COGS is Calculated

It's important to understand that COGS is calculated on the day the sale is created in LightSpeed. For example, if you create and send an EOM (End of Month) invoice in Vital on 2 April but backdate it to 31 March, the COGS calculation in LightSpeed will occur on 2 April.

When integrated with Xero, the COGS line will appear on the register closure. This is the sum of the average cost of each product sold within that register closure. When you sell a product (e.g., a widget for $100), LightSpeed uses the supplier cost (e.g., $10 or $80) to determine the COGS and posts this to Xero during the register close process.

To verify the amount of COGS calculated per register closure, see Validating a Single Register Closure COGS Figure in LightSpeed for step-by-step instructions.

Xero will not manage individual adjustments made outside of the selling process for products directly. Instead, inventory adjustments will need to be done manually via journal entries in Xero.

Frequently Asked Questions

How do I compare my Xero COGS account to LightSpeed amount?

Refer to Comparing Xero COGS Account to LightSpeed COGS Amount for step-by-step instructions.

I can't see some of my COGS posted in Xero, what do I do?

Refer to Comparing Xero COGS Account to LightSpeed COGS Amount troubleshooting section for a checklist of items to check.

Important Reminders

Closing registers daily is not just a procedural task but a critical step for accurate COGS tracking.
Consistent monitoring of COGS recognition in Xero helps in early detection and resolution of potential issues.
Remember that inventory adjustments or voided sales must be done manually in Xero.