---
title: "How do I create a Cost of Goods Sold account and an Inventory Asset account in Xero?"
description: "Create Cost of Goods Sold and Inventory Asset accounts in Xero."
url: https://docs.taxomate.com/en/articles/6181551-how-do-i-create-a-cost-of-goods-sold-account-and-an-inventory-asset-account-in-xero
collection: "General"
updated: 2026-10-21
language: en
---

# How do I create a Cost of Goods Sold account and an Inventory Asset account in Xero?

Create Cost of Goods Sold and Inventory Asset accounts in Xero.

taxomate will automatically create a Cost of Goods Sold account and Inventory Asset account for you in Xero during Quick Setup. However, the following steps will show you how to create your own.  
​

## **STEP 1. Go to Chart of Accounts**

Ledger accounts are created in Xero Accounting by going to **Accounting > Chart of Accounts.**  
​

![](https://staticfiles.gleap.io/helpcenter/68a7b1342e2424396e93973d/20250822192103_5131)

## **STEP 2. Select Add Account**

![](https://staticfiles.gleap.io/helpcenter/68a7b1342e2424396e93973d/20250822192103_7500)

## **STEP 3. Create Cost of Goods Sold Account**

For Account Type select **Direct Costs** (under Expenses). For Name and Code, you can choose any you would like.

![](https://staticfiles.gleap.io/helpcenter/68a7b1342e2424396e93973d/20250822192103_0838)

## **STEP 4. Create Inventory Account**

For Account Type select **Current Asset** (under Assets). For Name and Code, you can choose any you would like.

![](https://staticfiles.gleap.io/helpcenter/68a7b1342e2424396e93973d/20250822192103_2517)

## **STEP 5. Select Account in taxomate**

Once you created your accounts in Xero, you can return to taxomate and select your new accounts in **Settings > Inventory**.