Cost Of Goods Sold In A Service Business

Cost of Goods Sold (COGS) in the business world is a measure of the direct costs associated with producing or selling your services. This figure reflects the cost of labor and materials used to deliver your service, such as salary, taxes, travel expenses, materials, and utilities. It does not include indirect expenses like overhead costs, marketing, or administrative salaries. By tracking COGS you can gain greater insight into the profitability of your business, allowing you to adjust pricing, plan for growth, and allocate resources. Put simply, understanding your Cost of Goods Sold is necessary for running a successful service business.