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Scenario: Segmenting Revenue & COGS at the Product Category Level
Separating your revenue / cost of goods sold at a category level provides for the most practical summary level for product revenue segmentation. Most ConnectWise partners might find that segmenting at "Category" level provide enough separation for product sales. If further segmentation inside cateogries is required, then revenue must be segmented at the Product Sub-Category Level.
For this example we will provide the most detailed, to demonstrate how this information is to be managed.
- Log into your xero organisation and from the top menu click on: Settings > General Settings > Chart of Accounts
- Select the "Chart of Accounts" item on the page.
- Click on the "Revenue" and "Expense" tab at the top of the list.
- Take Note of the following accounts details for each account required:
Example information to collect (based on xero screenshot above):
|Account Type||Revenue Segmented at||Category||Revenue Account||COGS Account|
Note: The Chart of Accounts in the screenshot is segmented by "Sub Category" in this example all revenue for the "Category" would be exported to the single account.
In this scenario, understanding how a product is structured is important. For this example we will show how the revenue and expense will be treated for the "Sale" and "Purchase" of the following ConnectWise Product Item.
- The ConnectWise Product Item screenshot shows the Category / Subcategory separation.
The following would be the GL Mapping Entry for the Category "[Sales] 1. Hardware"
- Based on our mapping table above the export to Xero would map to the following accounts:
- Revenue when Sold: 4-2010
- Expense when Bought: 5-2010
Depending on the level of segmentaion, the following table should be copied to a spreadsheet for ease of entry and reference. As the process must be completed through the connectwise interface, it pre-planning your mapping will save a lot of time flipping between applications (ConnectWise / xero)
|Account Type||Table||Record||Revenue Account||COGS Account|