The Costly Workflow Mistake Product-Based Businesses Keep Making

If you’re running a small to medium business that sells products—whether it’s online, in-store, or both—you know how many moving parts there are to keep things running smoothly. Between managing inventory, fulfilling orders, and keeping your financials in check, it’s a lot to juggle. But there’s one workflow mistake we see time and time again, and it’s costing businesses like yours more than you might realize: not properly closing off sales to generate accurate Cost of Goods Sold (COGS).

It’s a small step that’s easy to miss, but the ripple effects can be huge—messy inventory, inflated profits on paper, and even tax compliance headaches. The good news? It’s fixable, and we’re here to help you get it right.

Let’s break it down: why this happens, why it’s such a big deal, and what you can do about it (spoiler: you don’t have to figure it out alone).

Why Do Businesses Miss This Step?

It’s not that businesses are lazy or careless—far from it. This issue usually comes down to a mix of misunderstanding, disconnects, and old habits. Here are some of the most common reasons we’ve seen:

• “Out of Sight, Out of Mind” Syndrome: You’ve shipped the product, the customer’s happy, and you’ve moved on. But if you haven’t marked the sale as dispatched in your system, you’ve left the workflow hanging.
• Disconnected Systems: If your sales platform isn’t talking to your inventory or accounting software, it’s easy for things to get lost in translation.
• Inherited Chaos: Maybe you’ve switched systems recently, or you’re still working through bad habits from the way things were done before. Either way, old data or processes can trip you up.
• Training Gaps: Staff turnover or incomplete training can mean that key steps—like closing off sales—are missed simply because nobody knew they were supposed to do it.
• Too Many Hats, Not Enough Time: For small teams or solo operators, it’s easy to miss a step when you’re wearing every hat in the business.

Sound familiar? You’re not alone. We’ve worked with plenty of businesses in this exact situation, and trust us—it’s fixable.

Why This Workflow Matters (A Lot)

Skipping this step might seem harmless at first—after all, the product is shipped, the customer is happy, and the sale is technically done, right? Not quite. Behind the scenes, failing to properly close off sales creates a domino effect that can throw off your entire operation. From inaccurate financial reports to inventory discrepancies and tax headaches, this small oversight can quietly snowball into a big problem. The longer it goes unnoticed, the harder (and more expensive) it becomes to fix.

Here’s why it’s such a big deal:

• Your Financials Are Out of Whack: If you’re not closing sales properly, your Cost of Goods Sold (COGS) won’t be accurate. This inflates your profits on paper, giving you a false sense of how well your business is doing. It can also throw off your Profit & Loss (P&L) statement, which is critical for making informed decisions or preparing for tax time.
• Inventory Gets Messy: Orders that aren’t marked as dispatched can hang around in a “limbo” state in your inventory system. This can make it look like you have stock you’ve already sold or, worse, lead to overselling and disappointing customers.
• Tax and Compliance Nightmares: Incorrect COGS reporting can cause trouble when it’s time to lodge your BAS or prepare your tax return. If this issue spans multiple months (or years), fixing it retroactively can be a major headache.
• Operational Inefficiencies: Your team ends up wasting time trying to reconcile reports, fix errors, and figure out why things aren’t adding up. It’s time you could be spending on growing the business instead.
• Missed Opportunities: When your data isn’t accurate, it’s hard to spot trends or make smart decisions about stock, pricing, or growth strategies. You’re flying blind, and that’s not where you want to be.

How to Spot (and Fix) the Problem

The good news? If you’re reading this and thinking, “Uh-oh, that sounds like us,” you’ve already taken the first step: recognizing there’s an issue. The next step is figuring out how big the problem is and what actions you need to take to fix it.

Here’s a high-level look at the steps you’ll need to take:

• Pinpoint the Gaps: Start by reviewing your systems and workflows to identify where things are breaking down. Are orders getting stuck in a “pending” state? Are your systems integrated and updating properly? Look for the points where the process stops short.
• Assess the Damage: Once you’ve identified the gaps, you’ll need to understand how far back the problem goes and how much it’s affecting your financials, inventory, and reporting.
• Draw a Line in the Sand: For long-standing issues, it’s often best to pick a point to start fresh. This might mean reconciling as much historical data as possible up to a certain date, then implementing new processes moving forward.
• Streamline Your Workflows: Put systems in place to ensure this doesn’t happen again. This could include automating steps, integrating your platforms, or creating clear, documented processes for your team to follow.
• Monitor and Maintain: Regularly run reports and audits to catch discrepancies before they snowball. Staying on top of this will help you maintain the integrity of your data over time.

While these steps might seem straightforward, the reality is that every business is different. The complexity of your systems, the extent of the issue, and the way your team operates all play a role in determining the best solution.

Why You Shouldn’t DIY This

Sure, you could try to piece this together yourself. But here’s the thing: fixing this kind of issue isn’t just about ticking a few boxes. It’s about understanding the bigger picture—how your sales, inventory, and accounting systems all work together—and ensuring that every piece fits seamlessly.

If you miss something, or worse, fix it the wrong way, you could end up creating even bigger problems down the line. Think tax implications, inaccurate reporting, or inventory chaos. And if the issue has been going on for months (or years), untangling it requires a level of expertise that goes beyond basic troubleshooting.

This is where having an expert in your corner makes all the difference. At SMB Consultants, we help product-based businesses like yours navigate these challenges every day. Whether it’s reviewing your workflows, setting up integrations, or helping you clean up your data, we’ve got the experience to guide you through the process and get it right the first time.

Don’t Wait Until It’s Too Late

This is one of those problems that often goes unnoticed until it’s too late. Maybe your accountant flags it, or you’re preparing for an audit, and suddenly you’re scrambling to fix months (or years) of data. Don’t let it get to that point.

If you’re not sure whether this issue is affecting your business, let’s chat. At SMB Consultants, we specialize in helping businesses like yours navigate these challenges. We’ll help you untangle the mess, put better processes in place, and give you the confidence that your data is accurate and your business is on the right track.

Ready to Fix It?

Don’t let this one workflow hold your business back. Reach out to SMB Consultants today, and let’s get your systems running smoothly. Whether it’s a quick chat to point you in the right direction or a full review of your workflows, we’re here to help.