Cost of Goods Sold is an accounting term that can seem a little scary, but it's pretty simple. It's sometimes referred to as Cost of Sales (COS). Simply put, it's any costs directly related to providing the service that you're offering to a customer.
Depending on how detailed you track your cost it can include things like:
As a small example, say you're doing a landscaping job and you're charging the customer $5000 for the job. Your costs for the job might look something like this:
Considering those costs, your COGS would be the total of all of those: $3310.
Your business's profit is a great way to see how much money your business is actually bringing in, but margins can be an even better way to measure how well...Continue reading...