Cost of Goods Sold (COGS) is a metric used to measure the direct cost associated with providing products and services to customers. For service companies, this usually includes expenses such as salaries, materials, and equipment costs. COGS should be calculated on a regular basis so that businesses can gain an accurate picture of their profitability. By tracking COGS, business owners can ensure they are pricing their products or services correctly to maximize their profits. Accurately calculating COGS will help businesses optimize their operations and resources for success.