{"id":4065,"date":"2013-05-08T08:27:42","date_gmt":"2013-05-08T06:27:42","guid":{"rendered":"http:\/\/www.officetodo.com\/public\/?p=4065"},"modified":"2013-05-05T12:28:40","modified_gmt":"2013-05-05T10:28:40","slug":"i-provide-services-whats-part-of-my-cost-of-sales","status":"publish","type":"post","link":"http:\/\/www.officetodo.com\/public\/i-provide-services-whats-part-of-my-cost-of-sales\/","title":{"rendered":"I provide services. What\u2019s part of my \u201ccost of sales\u201d?"},"content":{"rendered":"<p>With selling goods, your \u201ccost of sales\u201d is the expense you made to initially buy the goods. First off they\u2019re in inventory on the balance sheet and as you sell them, they\u2019re taken off from the inventory and shown on the income statement as an expense made to make a sale. Now with services, there are usually no goods.\u00a0<!--more--><\/p>\n<p>Providing services you have people, right? Those people generate expenses \u2013 payroll as the biggest, office utilities they use, services they themselves use in their work and so on.<\/p>\n<p>Now think about \u201ccost of sales\u201d. Those are the expenses that can directly be attributed to the sale and not supporting the sale or business. Supporting the sale is usually promotional expenses and business supportive expenses are generally categorized under \u201coperating expenses\u201d or something similar.<\/p>\n<p>As such, when we talk about providing services and their \u201ccost of sales\u201d, it\u2019s those that are done to actually make the sale \u2013 i.e. the hairdresser\u2019s payroll since he or she is the one actually providing the service. Or products bought to be used on the costumers. Again, needed to make the sale. Or the water, electricity and so on \u2013 if it\u2019s needed to make the sale, it\u2019s directly attributable to the sale.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>With selling goods, your \u201ccost of sales\u201d is the expense you made to initially buy the goods. First off they\u2019re in inventory on the balance sheet and as you sell them, they\u2019re taken off from the inventory and shown on the income statement as an expense made to make a sale. Now with services, there [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[25,40],"tags":[],"class_list":["post-4065","post","type-post","status-publish","format-standard","hentry","category-1-basic-accounting","category-1-12-expenses"],"aioseo_notices":[],"_links":{"self":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/4065","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/comments?post=4065"}],"version-history":[{"count":2,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/4065\/revisions"}],"predecessor-version":[{"id":4070,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/4065\/revisions\/4070"}],"wp:attachment":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/media?parent=4065"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/categories?post=4065"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/tags?post=4065"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}