Thanks for posting here, @jaywolfe,

Before doing anything, I always recommend consulting an accounting professional for this. They can provide accounting advice for your business type and guide you with the right thing to track your cost accurately.

Some of us here are not trained tax professionals, so you will need them for confirmation.

If you need to set up the expense account, use the steps below:

1. Go to the Gear icon then Chart of Accounts.
2. Click New then pick Cost of Goods Sold.
3. Pick a COS Detail Type the add the name of the account. See this example:
4. Once done, click Save and Close.

To add an item to assign the COS, follow the steps below:

1. To do that, tap the Gear icon the choose Products and Services.
2. Click New then pick the type you want to use.
3. Make sure to associate the correct accounts you created in the Chart of Accounts into the item.
4. Fill out all the information about the item then press Save and close.

If you have any questions about this, please let me know in the comment below. Have a god one!