Cost of Goods Sold (COGS) Calculation with Stateset API
This guide provides comprehensive instructions for calculating the Cost of Goods Sold (COGS) using the Stateset API. Designed for manufacturers and businesses managing inventory, this document details how to leverage Stateset to track inventory value, production costs, and ultimately determine COGS for improved profitability analysis and cost control.
By following this guide, you will learn to integrate Stateset for managing inventory lifecycles, tracking costs associated with production, and implementing standard COGS calculation methodologies.
Table of Contents
- Introduction
- Prerequisites
- Getting Started: SDK Setup
- Core Concepts: COGS and Inventory Flow
- API Workflow: Tracking Costs for COGS Calculation
- Costing Methodologies
- Advanced COGS Considerations
- Error Handling Best Practices
- Troubleshooting Common Issues
- Support Resources
- Conclusion
Introduction
Cost of Goods Sold (COGS) represents the direct costs incurred in producing goods sold by a company. Accurate COGS calculation is fundamental for assessing gross profit, managing operational expenses, and making strategic business decisions. This guide demonstrates how the Stateset API facilitates precise COGS tracking by managing purchase orders, inventory movements, work orders, and associated costs.
What You’ll Achieve:
- Configure the Stateset Node.js SDK for API interaction.
- Understand the relationship between COGS, inventory valuation, and production processes.
- Utilize the Stateset API to record costs from purchasing through production.
- Implement logic to calculate COGS using tracked data.
- Generate periodic COGS reports for analysis.
- Apply best practices for error handling and data integrity.
Prerequisites
- Node.js (version 16 or higher recommended).
- An active Stateset account and API Key.
- Basic understanding of Javascript (
async
/await
) and REST APIs.
- Familiarity with manufacturing concepts (Purchase Orders, Work Orders, BOMs, Inventory).
Getting Started: SDK Setup
Begin by integrating the Stateset SDK into your application environment.
1. Install the Stateset Node.js SDK
Use npm or yarn to add the SDK package to your project.
npm install stateset-node
# or
# yarn add stateset-node
Securely store your Stateset API key using environment variables. Avoid hardcoding keys directly in your source code.
# Example for bash/zsh shells. Adapt for your environment (e.g., .env file).
export STATESET_API_KEY='your_api_key_here'
3. Initialize the Stateset Client
Instantiate the client in your application using your API key.
import { stateset } from 'stateset-node';
// Ensure the environment variable is loaded (e.g., using dotenv)
if (!process.env.STATESET_API_KEY) {
throw new Error("STATESET_API_KEY environment variable is not set.");
}
// Initialize the client
const client = new stateset(process.env.STATESET_API_KEY);
// Optional: Verify API connection
async function verifyConnection() {
try {
const health = await client.system.healthCheck();
console.log('Stateset API Connection Status:', health.status);
if (health.status !== 'OK') {
console.warn('API health check returned non-OK status:', health);
}
} catch (error) {
console.error('Failed to connect to Stateset API:', error.message);
// Depending on application needs, you might want to exit or retry
}
}
verifyConnection();
Core Concepts: COGS and Inventory Flow
Understanding these core concepts is essential for implementing COGS calculations effectively.
What is COGS?
COGS includes all direct costs associated with producing goods that a company sells. For manufacturers, this encompasses raw materials, direct labor, and manufacturing overhead directly tied to production. It excludes indirect costs like sales, marketing, or general administrative expenses.
The Role of Inventory:
Inventory is central to COGS. The flow of costs through inventory directly impacts the final COGS value. Stateset helps track inventory quantity and value as it moves through different stages:
- Purchase Order (PO): Captures the initial cost of raw materials, increasing raw material inventory value.
- Work Order (WO) / Bill of Materials (BOM): Defines the components (raw materials, sub-assemblies) and potentially labor/overhead needed. Consuming components transfers their cost from Raw Materials to Work-in-Progress (WIP).
- Work-in-Progress (WIP): Represents the value of partially completed goods.
- Finished Goods: Upon WO completion, the total cost accumulated in WIP transfers to Finished Goods inventory.
- Sale: When a finished good is sold, its cost is removed from inventory and recognized as COGS on the income statement.
Costing Methods:
The method used to value inventory withdrawn affects COGS:
- Average Cost: Uses a simple average cost of all identical items in inventory. Calculated as Total Cost of Goods Available for Sale / Total Units Available for Sale.
- Weighted Average Cost: Calculates a new average cost after each purchase, weighting by quantity. More responsive to price changes than simple average.
- FIFO (First-In, First-Out): Assumes the first items added to inventory are the first ones sold. COGS reflects the cost of the oldest inventory.
- LIFO (Last-In, First-Out): Assumes the last items added to inventory are the first ones sold. COGS reflects the cost of the newest inventory. (Note: LIFO is not permitted under IFRS).
Stateset provides the data foundation (tracking individual inventory receipts/movements with costs) to implement these methods. The examples below primarily focus on tracking costs; implementing strict FIFO/LIFO/Weighted Average often requires specific querying and calculation logic based on the tracked inventory movements.
API Workflow: Tracking Costs for COGS Calculation
This section details using the Stateset API to track costs throughout the inventory lifecycle, enabling accurate COGS calculation.
Step 1: Recording Purchase Costs
Capture the cost of incoming raw materials via Purchase Orders and Inventory updates.
A. Create a Purchase Order
Record the details of a purchase, including items, quantities, and unit costs.
/**
* Creates a Purchase Order in Stateset.
* @param {object} poData - Data for the new Purchase Order.
* @returns {Promise<object>} The created Purchase Order object.
*/
async function createPurchaseOrder(poData) {
try {
console.log('Creating Purchase Order with data:', poData);
const newPO = await client.purchaseorder.create({
number: poData.number,
supplier: poData.supplier,
order_date: poData.orderDate, // Expects ISO 8601 format string
expected_delivery_date: poData.expectedDeliveryDate, // Expects ISO 8601 format string
status: poData.status, // e.g., 'OPEN', 'SUBMITTED'
total_amount: poData.totalAmount, // Ensure this matches line item totals
currency: poData.currency, // e.g., 'USD'
line_items: poData.lineItems // Array of { part_number, quantity, unit_cost }
});
console.log("Purchase Order created successfully:", newPO.id);
return newPO;
} catch (error) {
console.error("Error creating purchase order:", error.response ? error.response.data : error.message);
throw error; // Re-throw for upstream handling
}
}
// Example Usage:
const poDetails = {
number: `PO-${Date.now()}`, // Generate a unique PO number
supplier: 'Supplier Inc.',
orderDate: new Date().toISOString(),
expectedDeliveryDate: new Date(Date.now() + 7 * 86400000).toISOString(), // 7 days from now
status: 'OPEN',
totalAmount: 150.00,
currency: 'USD',
lineItems: [
{ part_number: 'RAW_MAT_A', quantity: 10, unit_cost: 5.00 },
{ part_number: 'RAW_MAT_B', quantity: 5, unit_cost: 20.00 }
]
};
// const purchaseOrder = await createPurchaseOrder(poDetails);
Purpose: This API call logs the purchase intent and expected costs. The unit_cost
on line items is crucial for later inventory valuation.
B. Receive Items and Update Inventory
When goods arrive, update the PO status and record the items received into inventory, capturing their actual cost.
/**
* Records received items from a PO line into inventory.
* Assumes each call represents a distinct receipt/movement.
* @param {string} partNumber - The part number received.
* @param {number} quantity - The quantity received.
* @param {number} unitCost - The actual cost per unit from the PO/invoice.
* @param {string} purchaseOrderId - Optional: Link to the source PO.
* @returns {Promise<object>} The created Inventory movement record.
*/
async function recordInventoryReceipt(partNumber, quantity, unitCost, purchaseOrderId = null) {
try {
console.log(`Recording inventory receipt for ${partNumber}: Qty=${quantity}, Cost=${unitCost}`);
const inventoryData = {
part_number: partNumber,
quantity: quantity, // Positive for receipts
unit_cost: unitCost,
source_document_id: purchaseOrderId,
source_document_type: 'purchase_order',
};
const newInventoryEntry = await client.inventory.create(inventoryData);
console.log(`Inventory updated for part ${partNumber}. Entry ID:`, newInventoryEntry.id);
return newInventoryEntry;
} catch (error) {
console.error(`Error updating inventory for part ${partNumber}:`, error.response ? error.response.data : error.message);
throw error;
}
}
/**
* Marks a Purchase Order as partially or fully received.
* Updates inventory based on received line items.
* @param {string} poId - The ID of the Purchase Order to receive against.
* @param {Array<object>} receivedItems - Array of { part_number, quantity, unit_cost } received.
* @param {string} finalStatus - The new status for the PO ('PARTIALLY_RECEIVED', 'RECEIVED').
* @returns {Promise<object>} The updated Purchase Order object.
*/
async function receivePurchaseOrderItems(poId, receivedItems, finalStatus) {
try {
console.log(`Receiving items for PO ID: ${poId}`);
// 1. Record each received item as an inventory movement
for (const item of receivedItems) {
await recordInventoryReceipt(item.part_number, item.quantity, item.unit_cost, poId);
}
// 2. Update the Purchase Order status
const updatedPO = await client.purchaseorder.update(poId, {
status: finalStatus,
received_date: new Date().toISOString() // Record receipt date
});
console.log(`Purchase Order ${poId} status updated to ${finalStatus}`);
return updatedPO;
} catch (error) {
console.error(`Error processing receipt for PO ${poId}:`, error.response ? error.response.data : error.message);
throw error;
}
}
// Example Usage (assuming 'purchaseOrder' object from previous step):
const itemsReceived = [
{ part_number: 'RAW_MAT_A', quantity: 10, unit_cost: 5.00 },
{ part_number: 'RAW_MAT_B', quantity: 5, unit_cost: 20.00 }
];
const receivedPO = await receivePurchaseOrderItems(purchaseOrder.id, itemsReceived, 'RECEIVED');
Purpose: This workflow creates distinct inventory
records (movements) for each receipt. Each record stores the quantity
and unit_cost
at that point in time. This historical cost layering is the foundation for accurate COGS methods like FIFO or Weighted Average. Updating the PO status closes the loop on the purchasing process.
Step 2: Tracking Production Costs (Work Orders & BOMs)
Track the consumption of components and the creation of finished goods using Work Orders.
A. Retrieve Work Order and BOM Details
Fetch completed Work Orders within a period and their associated Bills of Materials (BOMs) to understand component usage.
/**
* Fetches completed Work Orders within a given date range.
* @param {string} startDateISO - ISO 8601 start date string.
* @param {string} endDateISO - ISO 8601 end date string.
* @returns {Promise<Array<object>>} List of completed Work Order objects.
*/
async function getCompletedWorkOrders(startDateISO, endDateISO) {
try {
console.log(`Fetching completed Work Orders from ${startDateISO} to ${endDateISO}`);
const workOrders = await client.workorder.list({
filter: {
// Assuming status field exists and 'COMPLETED' is a valid value
status: { eq: 'COMPLETED' },
// Assuming completion_date field exists for filtering
completion_date: { gte: startDateISO, lte: endDateISO }
},
limit: 1000 // Adjust limit as needed, handle pagination if necessary
});
console.log(`Found ${workOrders.length} completed Work Orders.`);
return workOrders;
} catch (error) {
console.error("Error fetching work orders:", error.response ? error.response.data : error.message);
throw error;
}
}
/**
* Retrieves the Bill of Materials (BOM) associated with a Work Order.
* @param {object} workOrder - The Work Order object.
* @returns {Promise<object>} The BOM object.
*/
async function getBOMForWorkOrder(workOrder) {
try {
if (!workOrder.bill_of_material_id) {
throw new Error(`Work Order ${workOrder.id} does not have a linked BOM ID.`);
}
console.log(`Fetching BOM ID: ${workOrder.bill_of_material_id} for Work Order ${workOrder.id}`);
const bom = await client.billofmaterials.get(workOrder.bill_of_material_id);
if (!bom) {
throw new Error(`BOM with ID ${workOrder.bill_of_material_id} not found.`);
}
console.log(`Retrieved BOM: ${bom.name}`);
return bom;
} catch (error) {
console.error(`Error getting BOM for Work Order ${workOrder.id}:`, error.response ? error.response.data : error.message);
throw error;
}
}
// Example Usage:
const startDate = new Date(Date.UTC(2023, 11, 1)).toISOString(); // Dec 1, 2023
const endDate = new Date(Date.UTC(2023, 11, 31, 23, 59, 59, 999)).toISOString(); // Dec 31, 2023
// const completedWorkOrders = await getCompletedWorkOrders(startDate, endDate);
if (completedWorkOrders.length > 0) {
const firstWO = completedWorkOrders[0];
const bom = await getBOMForWorkOrder(firstWO);
console.log("BOM Components:", bom.components);
}
Purpose: Identify the production activities (WOs) and the required components (BOMs) for finished goods produced in a specific period.
B. Determine Cost of Components Consumed (Simplified Example)
Calculate the cost of components used in a Work Order. Note: This example uses a simplified approach (fetching the latest cost). For accurate costing (FIFO/Average), you’d need logic to query and consume specific inventory
cost layers based on your chosen method.
/**
* Retrieves the cost of a specific component part.
* @param {string} partNumber - The component's part number.
* @returns {Promise<number>} The unit cost of the component.
*/
async function getComponentCost_Simplified(partNumber) {
try {
// Fetch the most recent inventory entry (receipt) for this part
const inventoryMovements = await client.inventory.list({
filter: { part_number: { eq: partNumber }, quantity: { gt: 0 } }, // Look for receipts
sort: '-created_at', // Get the most recent first
limit: 1
});
if (inventoryMovements.length === 0) {
console.warn(`No recent inventory receipt found for part number: ${partNumber}. Cost assumed 0.`);
// Or throw an error depending on business rules
return 0;
// throw new Error(`No inventory cost found for part number: ${partNumber}`);
}
// Using optional chaining for safety
const latestCost = inventoryMovements[0]?.unit_cost;
if (latestCost === undefined || latestCost === null) {
console.warn(`Latest inventory entry for ${partNumber} has no unit_cost. Cost assumed 0.`);
return 0;
}
console.log(`Latest cost for ${partNumber}: ${latestCost}`);
return latestCost;
} catch (error) {
console.error(`Error getting component cost for part ${partNumber}:`, error.response ? error.response.data : error.message);
// Don't re-throw here if a default/warning is acceptable
return 0; // Return 0 cost if lookup fails critically, or handle differently
}
}
/**
* Calculates the estimated COGS for a single Work Order based on its BOM components.
* Uses the SIMPLIFIED component costing method (latest cost).
* @param {object} workOrder - The completed Work Order object.
* @returns {Promise<object>} Contains work order number, total cost, and quantity produced.
*/
async function calculateCOGSForWorkOrder_Simplified(workOrder) {
try {
const bom = await getBOMForWorkOrder(workOrder);
let totalMaterialCost = 0;
if (!bom.components || bom.components.length === 0) {
console.warn(`BOM for Work Order ${workOrder.id} has no components.`);
// Handle cases with no components (e.g., service WOs) if applicable
} else {
for (const component of bom.components) {
// Assumes component object has item_id (part number) and quantity fields
if (!component.item_id || component.quantity === undefined) {
console.warn(`Skipping invalid component in BOM ${bom.id}:`, component);
continue;
}
const componentCost = await getComponentCost_Simplified(component.item_id);
totalMaterialCost += componentCost * component.quantity;
}
}
// Extract quantity produced from the work order (adapt field name as needed)
// Example: Assuming quantity is on the WO itself or summed from line items
const quantityProduced = workOrder.quantity_produced || workOrder.work_order_line_items?.reduce((sum, item) => sum + item.quantity, 0) || 0;
if (quantityProduced === 0) {
console.warn(`Work Order ${workOrder.id} has zero quantity produced. Average cost cannot be calculated.`);
}
console.log(`Calculated Material Cost for WO ${workOrder.number}: ${totalMaterialCost}`);
return {
workOrderNumber: workOrder.number,
totalCost: totalMaterialCost, // Renaming for clarity - this is MATERIAL cost
quantityProduced: quantityProduced
};
} catch (error) {
console.error(`Error calculating COGS for Work Order ${workOrder.id}:`, error.message);
// Return a structure indicating failure or partial data
return {
workOrderNumber: workOrder?.number || 'Unknown',
totalCost: null,
quantityProduced: null,
error: error.message
};
}
}
// Example Usage:
if (completedWorkOrders.length > 0) {
const cogsEstimate = await calculateCOGSForWorkOrder_Simplified(completedWorkOrders[0]);
console.log("Simplified COGS Estimate for Work Order:", cogsEstimate);
}
Purpose: This step estimates the material cost of producing goods based on the BOM and component costs recorded in Stateset. Crucially, this simplified example uses the latest component cost. For accurate accounting, implement logic reflecting your chosen inventory valuation method (FIFO, Average) by querying specific inventory
movement records. Furthermore, remember to incorporate direct labor and overhead costs associated with the Work Order for a complete COGS picture.
Step 3: Calculating COGS Based on Recorded Data
Use the tracked cost data to calculate COGS for items sold during a period. This typically involves matching sales records to specific finished goods inventory layers or applying an average cost.
/**
* Calculates total COGS for a period based on completed Work Orders.
* @param {Array<object>} workOrders - List of completed work orders for the period.
* @returns {Promise<object>} Object containing total COGS and quantity.
*/
async function calculateTotalCOGSForPeriod_Simplified(workOrders) {
let totalCOGS = 0;
let totalQuantityProduced = 0;
const failedCalculations = [];
for (const workOrder of workOrders) {
const workOrderCOGS = await calculateCOGSForWorkOrder_Simplified(workOrder);
if (workOrderCOGS.totalCost !== null && workOrderCOGS.quantityProduced !== null) {
totalCOGS += workOrderCOGS.totalCost;
totalQuantityProduced += workOrderCOGS.quantityProduced;
} else {
failedCalculations.push({ woNumber: workOrder.number, error: workOrderCOGS.error });
}
}
if (failedCalculations.length > 0) {
console.warn("Some WO COGS calculations failed:", failedCalculations);
}
console.log(`Total Estimated Material COGS for period: ${totalCOGS}, Total Quantity: ${totalQuantityProduced}`);
return {
totalCOGS, // Represents total MATERIAL cost based on simplified method
totalQuantityProduced,
averageCOGSPerUnit: totalQuantityProduced > 0 ? totalCOGS / totalQuantityProduced : 0,
};
}
// Example Usage:
const startDate = '2023-12-01T00:00:00.000Z';
const endDate = '2023-12-31T23:59:59.999Z';
const completedWorkOrders = await getCompletedWorkOrders(startDate, endDate);
const periodCOGS = await calculateTotalCOGSForPeriod_Simplified(completedWorkOrders);
console.log("Period COGS Summary (Simplified):", periodCOGS);
Purpose: Aggregate the costs associated with production during a period. Remember: This aggregation relies on the simplified calculation from Step 2B. A production-ready system would implement specific costing logic here, likely correlating sales data with finished goods inventory withdrawals based on FIFO, LIFO, or Average Cost methods, and incorporating labor/overhead.
Step 4: Periodic COGS Reporting
Generate reports summarizing COGS for analysis and financial reporting.
/**
* Generates a detailed COGS report for a specified period.
* Uses the simplified calculation methods defined earlier.
* @param {string} startDateISO - ISO 8601 start date.
* @param {string} endDateISO - ISO 8601 end date.
* @returns {Promise<object>} A structured COGS report.
*/
async function generateCOGSReport_Simplified(startDateISO, endDateISO) {
try {
console.log(`Generating COGS Report from ${startDateISO} to ${endDateISO}`);
const workOrders = await getCompletedWorkOrders(startDateISO, endDateISO);
const workOrderDetails = [];
let totalCOGS = 0;
let totalQuantityProduced = 0;
for (const workOrder of workOrders) {
const workOrderCOGS = await calculateCOGSForWorkOrder_Simplified(workOrder);
if (workOrderCOGS.totalCost !== null && workOrderCOGS.quantityProduced !== null) {
totalCOGS += workOrderCOGS.totalCost;
totalQuantityProduced += workOrderCOGS.quantityProduced;
workOrderDetails.push({
workOrderNumber: workOrder.number,
quantityProduced: workOrderCOGS.quantityProduced,
totalMaterialCost: workOrderCOGS.totalCost,
averageMaterialCostPerUnit: workOrderCOGS.quantityProduced > 0 ? workOrderCOGS.totalCost / workOrderCOGS.quantityProduced : 0
});
} else {
// Optionally include failed calculations in the report
workOrderDetails.push({
workOrderNumber: workOrder.number,
error: workOrderCOGS.error || 'Calculation failed'
});
}
}
const report = {
period: `${startDateISO.split('T')[0]} to ${endDateISO.split('T')[0]}`,
totalMaterialCOGS: totalCOGS,
totalQuantityProduced: totalQuantityProduced,
averageMaterialCOGSPerUnit: totalQuantityProduced > 0 ? totalCOGS / totalQuantityProduced : 0,
workOrderBreakdown: workOrderDetails
};
console.log("COGS Report Generated Successfully.");
return report;
} catch (error) {
console.error("Error generating COGS Report:", error.message);
throw error;
}
}
// Example Usage:
const startDateReport = '2023-12-01T00:00:00.000Z';
const endDateReport = '2023-12-31T23:59:59.999Z';
const report = await generateCOGSReport_Simplified(startDateReport, endDateReport);
console.log("Generated COGS Report (Simplified):", JSON.stringify(report, null, 2));
Purpose: Consolidate calculated COGS data into a structured format for review, analysis, and integration with financial systems. This report reflects the simplified material cost calculation.
Costing Methodologies
As highlighted in the examples, the calculateCOGSForWorkOrder_Simplified
function used the latest component cost. This is often insufficient for formal accounting. Stateset’s inventory
resource, by tracking individual movements with unit_cost
, provides the necessary data foundation to implement standard costing methods:
- Average Cost: Requires calculating a running average cost for each part number based on all receipts and their costs over time. When components are consumed, this average cost is used.
- Weighted Average Cost: Requires recalculating the average cost after each purchase. Query
inventory
movements, apply the weighted average formula, and use this cost for subsequent consumptions until the next purchase.
- FIFO/LIFO: Requires querying
inventory
movements sorted by created_at
(or another relevant date field). Consume the oldest (FIFO) or newest (LIFO) cost layers first, tracking remaining quantities in each layer.
Implementing these methods involves more complex query logic against the inventory
resource data than shown in the simplified examples. You would typically fetch relevant inventory movements for a component, sort them appropriately, and apply the chosen costing logic to determine the value of consumed items.
Advanced COGS Considerations
- Direct Labor and Overhead: True COGS includes direct labor and allocated manufacturing overhead. Track these costs (e.g., via Work Order operations or separate journal entries) and incorporate them into your COGS calculations alongside material costs. Stateset might offer features or custom fields to facilitate this.
- Inventory Adjustments: Handle scrap, returns, and physical count adjustments by creating corresponding
inventory
movements (negative quantity for consumption/loss, positive for found items) with appropriate cost implications (often at current average cost or specific layer cost).
- Standard Costing: Some businesses use predetermined standard costs for materials, labor, and overhead. Actual costs are tracked, and variances between standard and actual are analyzed separately. Stateset can store standard costs (e.g., on item masters) alongside actual costs tracked via POs/WOs.
- Real-time Integration: Utilize Stateset Webhooks to trigger COGS-related calculations or updates in other systems (like accounting software) in real-time when relevant events occur (e.g., WO completion, shipment).
Error Handling Best Practices
Robust error handling is critical for accurate financial calculations.
- Specific Error Catching: Use
try...catch
blocks around all API calls. Inspect the error
object. Stateset SDK errors often have error.response.data
containing details from the API.
- Input Validation: Validate data before sending it to the API (e.g., check for required fields, correct data types, sensible values).
- Retry Mechanisms: Implement exponential backoff retries for transient network errors or rate limiting (e.g., HTTP 429, 503). Avoid retrying non-transient errors (e.g., HTTP 400 Bad Request, 404 Not Found) without correcting the request.
- Idempotency: When creating resources that shouldn’t be duplicated (like POs), consider using idempotency keys if the API supports them, or implement checks to prevent duplicate creation.
- Centralized Logging: Log detailed error information (timestamp, operation, input data summary, error message, stack trace, API response) to a centralized logging system for easier debugging and monitoring.
- Alerting: Set up alerts for critical failures in the COGS calculation process.
// Enhanced Error Handling Wrapper Example
async function safeApiOperation(operation, description) {
try {
console.log(`Attempting operation: ${description}`);
const result = await operation();
console.log(`Operation successful: ${description}`);
return result;
} catch (error) {
const timestamp = new Date().toISOString();
let errorDetails = {
message: error.message,
stack: error.stack,
description: description,
timestamp: timestamp
};
if (error.response) {
// Capture API error details
errorDetails.apiStatus = error.response.status;
errorDetails.apiResponse = error.response.data;
}
console.error(`Error during operation: ${description}`, errorDetails);
// Log to external system (replace console.error)
// externalLogger.error('COGS Process Error', errorDetails);
// Notify relevant personnel (placeholder)
// notifyTeam(`Critical error in ${description}: ${error.message}`);
// Re-throw or return an error indicator based on desired flow
throw new Error(`Operation failed: ${description}. Details: ${errorDetails.message}`);
}
}
// Usage Example:
const poDetails = { /* ... */ };
try {
const purchaseOrder = await safeApiOperation(
() => createPurchaseOrder(poDetails),
`Create PO ${poDetails.number}`
);
// ... continue workflow
} catch (finalError) {
console.error("Workflow halted due to critical error:", finalError.message);
// Handle the halt appropriately
}
Troubleshooting Common Issues
- Authentication Errors (401/403):
- Solution: Verify
STATESET_API_KEY
is correct, loaded properly into the environment, and hasn’t expired or been revoked. Check API key permissions.
- Validation Errors (400 Bad Request):
- Solution: Check the
error.response.data
for specific field errors. Ensure all required fields are provided, data types are correct (e.g., numbers vs. strings, ISO dates), and values are valid (e.g., status codes).
- Resource Not Found Errors (404):
- Solution: Double-check the IDs being used in
get
, update
, or delete
calls (e.g., poId
, bomId
). Ensure the resource actually exists.
- Incorrect COGS Calculations:
- Solution:
- Verify the
unit_cost
being recorded on inventory
movements is accurate.
- Review the logic used for
getComponentCost
or equivalent – ensure it aligns with your chosen costing method (FIFO, Average, etc.). Check the implementation carefully.
- Ensure all relevant costs (materials, labor, overhead) are included.
- Audit the BOMs for accuracy (correct components and quantities).
- Check the quantities produced on Work Orders.
- Data Inconsistencies:
- Solution: Implement regular data audits. Compare Stateset inventory levels/values with physical counts or accounting records. Ensure workflows correctly record all movements (receipts, consumptions, adjustments, shipments).
Support Resources
For further assistance, refer to the official Stateset resources:
Conclusion
This guide has demonstrated how to utilize the Stateset API to establish a robust foundation for Cost of Goods Sold calculation. By systematically tracking costs from procurement through production using Purchase Orders, Inventory movements, Work Orders, and BOMs, you can gain accurate insights into product profitability.
While the provided examples offer a starting point (particularly using simplified costing), remember to adapt the logic to incorporate your specific costing methodology (FIFO, Average Cost, etc.) and include all relevant cost components (labor, overhead) for comprehensive financial reporting.
Leveraging Stateset effectively for COGS calculation empowers data-driven decision-making, enhances cost control, and ultimately contributes to improved business performance. Refer to the support resources if you encounter challenges or require further clarification.
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**Summary of Key Changes:**
* **Tone:** More direct and professional language.
* **Clarity:** Added prerequisites. Sharpened definitions in "Core Concepts." Explicitly linked the Mermaid diagram steps to API actions.
* **API Workflow Structure:** Reorganized into logical steps (Record Purchase Costs, Track Production Costs, Calculate, Report).
* **Code Examples:**
* Added clear JSDoc comments explaining function purpose, params, and return values.
* Included `console.log` statements for better traceability during execution.
* Improved error handling within examples, logging API response data.
* **Crucially revised Costing:**
* Renamed simplified functions (`_Simplified`) and added prominent notes explaining their limitations (using latest cost, material-only).
* Removed the potentially misleading/complex Average/Weighted Average code examples.
* Added a dedicated "Costing Methodologies" section explaining *how* Stateset's data enables proper methods (FIFO, Average) by querying `inventory` movements, rather than providing a potentially flawed implementation.
* **Error Handling:** Provided more specific advice and an improved `safeApiOperation` wrapper example.
* **Troubleshooting:** Added more specific potential issues and solutions related to API usage and COGS logic.
* **Advanced Considerations:** Expanded slightly on overhead/labor, adjustments, and real-time integration.
* **Conclusion:** Summarized the benefits and reiterated the importance of implementing accurate costing logic beyond the simplified examples.