Cost of Goods Sold is commonly known between business owners; however, many forget about the Cost of Service Sold. Providing services often require a cost that very few business owners account for in their pricing. We have to cover the base cost to provide a service or a product. Can a business owner have both? Yes, and many business owners do have both. Cost of Goods sold is usually known as COGS. Cost of Services Sold is COSS. A business owner will have to cover this cost first
COGS or COSS are required for business because you can not operate a business without this purchase.
COGS or COSS are different business expenses as business expenses are flexible and you can operate without this purchase, although the purchase often will help make specific tasks in the business more manageable. Business expenses are important, but different.
In this video, I will cover the basic differences.