What cost of goods sold means
Cost of goods sold is the direct cost of the work you sold: materials, field labor and subs. Revenue minus it is gross profit.
Also called COGS, job costs, direct costs.
Where it shows up in your business
Separating job costs from overhead in your books is what makes gross margin meaningful. Set up your accounts that way from the start.
Work it out
- Free calculator: Profit margin calculator
- Money guide: Gross vs net margin
- Money: Money guides for contractors