Cost of goods sold (COGS) refers to the direct cost related to the production of the goods sold by a business. This amount includes the cost of the materials used in creating the good along with the direct labour costs used to produce the good. It excludes indirect expenses such as distribution costs and sales force costs.
Under Inventory Settings, if you select Yes, any order involving a product where the cost price in QuickBooks Online is not configured, fails to sync. This is reported in the sync error logs. This way you are alerted to set up the cost price for that product in QuickBooks Online and run the sync, after which those orders sync successfully.If you select No, the orders are synced irrespective of whether the cost price has been set or not.
Note: You cannot run COGS report at the individual product level if the cost price of the product is not specified in QuickBooks Online.