Why does the Cost of Sales account appear instead of Inventory in the Purchase Invoice entry?

Many times, purchase invoices for products are added, but sometimes there is an issue where the warehouse is not affected by the invoice, and instead, the Cost of sales account is impacted.

Several reasons may lead to this problem, including:

  • Manually typing the product name instead of selecting it from the product dropdown list.
  • Choosing a service instead of a product in the purchase invoice.
    • Services do not have inventory tracking or purchase cost, so they do not affect the inventory account; instead, they impact the Cost of Sales account.
  • Selecting a product without activating the ‘Inventory Tracking‘ option from within the product profile.
    • If inventory tracking is deactivated for a product, the system treats the product as either a non-tracked service or uses average cost.