This guide provides instructions on how to clear Cost of Goods Sold (COGS) from Xero for sales voided after your COGS adjustments has been conducted. It is crucial to follow this process to maintain accurate financial records.

Important Considerations

Before proceeding, it's essential to understand when and why COGS needs to be cleared:

1. COGS Posting: COGS is recorded in Xero when a register is closed in LightSpeed. Learn more here.
2. Voiding Within Register Period: If an invoice is created and then voided within the same register's open period, the COGS is not posted to Xero. Therefore, no action is needed.   
3. Voiding After Register Closure: If an invoice's register has been closed before the invoice is voided, the COGS will have been posted to Xero and requires manual clearing.

This process applies to invoices voided after your COGS adjustment has taken place. Separate instructions were provided for voided invoices before the the adjustment took place, see here.

Process to Clear Out COGS

Follow these steps to on how to clear out COGS:

Determine COGS Amount

1. Log into LightSpeed.
2. Go to the Sales Ledger
3. Find the specific voided invoice and note its date.
4. In another tab, go to Reports > Sales Reports.
5. Set the following report parameters:
   • Report type: Customer
   • Measure: Cost of goods sold
   • Date range: The date of the voided invoice
6. Apply Filters:
   • Click More filters.
   • Toggle ON "Include gift card sales."
   • Click into the "Filter report by a brand, channel, customer or other keyword" field and search and select the customer on the invoice.
7. It's recommended to save this report as "Voided Invoices" for future reference.
8. Click Format results and select "By SKU name." Click Apply.
9. Click Export Report.
10. Verify Information:
    • Double-check that the line items, revenue, and products in the report match the voided invoice. If no issues, move to step 11. 
11. The total COGS amount shown in the exported report is the amount that needs to be cleared from Xero.

Create Journal in Xero

1. In the Accounting menu in Xero, select Reports.
2. Find and open the Journal Report. You can use the search field in the top right corner.
3. Click Add new journal.
4. Enter a description in the Narration field (e.g., "Voided Invoice [invoice number]").
5. Enter the Date as the voided date.
6. Enter the Debit and Credit amounts, using the total COGS amount from the LightSpeed report.
7. The journal entry should resemble the example shown below.
   
8. Click Save as draft to save the journal without posting it to the general ledger (if you want your accountant to review it first). Alternatively, click Post to post the journal to the general ledger.
   • Caution: If you choose "Post and add another," the date of the posted journal will be used for the new journal entry. You may need to adjust the date if it's incorrect.

Important Notes

• Always verify that the COGS was posted to Xero before creating a journal entry. If you are unsure, please submit a support ticket.
• Accurate dates are crucial for proper financial reporting. Double-check the voided invoice date.
• If you are unsure about any step in this process, please consult with your accountant or contact support for assistance.