Gross Margin to Cost of Goods Reconciliation

I have been asked in the past to reconcile the Gross Margin to the Cost of Goods, or reconcile Gross Margin to the Ledger.
See below for steps is achieving reconciliation of Gross Margin to Cost of Goods or Ledger

1. Generate Gross Margin by Item Report: Accounts Receivables - Reports - Statistics - Customer - Gross Margin by item Report. (Run report by date range)
2. Review Gross Margin Report against Inventory Transactions to ensure that the Gross Margin report is OK: Inventory management - Reports - Transactions - Inventory Transactions. Ensure the Reference field in the Inventory Transactions table is set to "Sales Order" and that any Projects related transactions are not included (By removing financial vouchers in the projects numbering sequence)
3. Add up the Financial Cost Amount Column to the Adjustment Column and match to the value from the Gross Margin by item report. This should be zero
4. Next review the ledger or Cost of Goods to reconcile to the Gross Margin. The Cost of Goods sold can be found in the Ledger Transactions List with posting type "Sales order consumption'. General Ledger - Reports - Transaction - Ledger Transaction List filter by date range and posting type "Sales order Consumption"
5. This value of the Cost of Goods Sold should be reconciled to the Gross margin by item value.
6. If there is any difference, this would be attributed to adjustments from inventory closing as at month-end. We need to run two separate inventory adjustment reports to determine which sales orders have been corrected per the end of the month and after the end of the month
7. Inventory management - Reports - Transactions - Adjustments

(a) Ensure Date on the Inventory Settlements table is for the month in question (e.g 8/1/2010..8/31/2010) the P&L Posting of the Inventory Settlements table is set to "Sales Order Consumption" and that the Financial date of Inventory Transactions is less (<) than the first day of the month in question (e.g <8/1/2010)>

(b)Ensure Date on Inventory Settlements table is greater (>) than the last day of the month in question (e.g >8/31/2010), the P&L Posting of the Inventory Settlements table is set to "Sales Order Consumption" and that the Financial date of the Inventory Transactions is the month in question (e.g 8/1/2010..8/31..2010). Obtain the adjustment amount from this report

This analysis should be reconciled if the steps outlined are followed.

I also have an Excel Spreadsheet template which can be used to assist with the reconciliation. Feel free to reach out to me for assistance.

Good luck as you reconcile!