What are zero cost sale items?

When Luminous records a shipment, it stamps each line item with the unit cost of the goods sold — this becomes your Cost of Goods Sold (COGS) for that sale. A zero cost sale item is a shipped line item where that unit cost is $0.00.

This matters because:

  • COGS is understated — the sale appears more profitable than it really is.
  • Gross margin is overstated — the period's financials can't be trusted until the cost is filled in.

Because of this impact, the check is marked Blocking in the Order Integrity section of Close the Books. The report will show "Not Ready to Close" until all zero cost sale items are resolved.

Why does it happen?

A sale item records $0 cost when the product had no cost source available at the time the order was processed. Common causes:

  • The SKU was never received into inventory via a Receiving Report (so no receipt cost exists).
  • The product has no Estimated Landed Cost (ELC) set on its record.
  • No cost layers exist for the product (e.g., it was entered manually without a cost, or all prior cost layers were depleted).

Where to find them

  1. Go to Insights → Accounting → Close the Books.
  2. Select your date range (e.g., the month you are closing).
  3. Look for the Order Integrity section.
  4. If the "No zero-cost sale items" check is red/failing, click on it to expand the detail list.

The detail list shows each affected line item with:

  • SKU
  • Order number
  • Quantity and unit price (the revenue at risk)
  • Suggested ELC — the Estimated Landed Cost currently on the product record (if any)
  • Suggested Cost Layer — the most recent non-zero unit cost from the product's cost layers (if any)

How to resolve zero cost sale items

Step 1 — Select the items to fix

In the expanded detail list, tick the checkbox next to each line item you want to update. Use the header checkbox to select all items at once.

Step 2 — Choose a fix method

Two buttons appear above the list once at least one item is selected:

Option A: Use ELC (Estimated Landed Cost)

This applies the product's current Estimated Landed Cost to the selected sale items. Use this when the ELC on the product record is accurate and you want a quick, consistent fix across all affected lines for that SKU.

The "Suggested ELC" column shows the value that will be applied. If it is blank, the SKU has no ELC set and this option will not update that item.

This applies the most recent non-zero cost layer unit cost on file for the product. Use this when you trust the most recent receipt cost more than the ELC.

The "Suggested Cost Layer" column shows the value that will be applied. If it is blank, no eligible cost layer exists for that SKU.

Step 3 — Confirm

A confirmation pop-up will appear. Review and confirm. Luminous updates the cost on each selected sale item immediately.

Step 4 — Refresh the checklist

After fixing, reload the Close the Books page. The check will turn green once all zero cost sale items in the period have been resolved.

What if neither ELC nor Cost Layer is available?

If both suggested values are blank for a SKU, you must add a cost source to the product first:

  • Add an ELC: Go to the product's detail page, click Edit, enter a value in the Estimated Landed Cost field, and save. Then return to Close the Books to fix the item.
  • Record a Receiving Report: If the stock actually arrived via a purchase, ensure the Receiving Report is entered with the correct cost. A cost layer will then be created automatically.

Once a cost source exists, come back to Close the Books and apply the fix.

Bulk fix via CSV import

For a large number of affected SKUs, you can fix costs in bulk:

  1. On the Close the Books page, click Export CSV to download a file of all SKUs with errors.
  2. Open the file in Excel and fill in the Estimated Landed Cost column for each SKU.
  3. Save the file as .xlsx.
  4. Return to Close the Books and click Import Cost. Make sure your date range matches the period before importing — the import applies costs to all sale items for each SKU within that date range.
  5. Map the columns (SKU → Master SKU, Estimated Landed Cost → Unit Cost) and complete the import.

Tips

  • Resolve zero cost items before running your month-end financial reports — the COGS figures in those reports reflect the corrected costs only after the fix is saved.
  • If the same SKU appears across multiple periods, set its ELC or create a Receiving Report so future orders capture the cost automatically.
  • Zero cost sale items are different from zero valuation inventory (SKUs with on-hand stock but no cost layers). Both are checked in Close the Books, but they appear in separate sections and are fixed differently.