If you buy in goods to sell and don’t hold any stock, also known as inventory, then this is fairly straightforward. In this guide we’ll explain both approaches and give you the formulas for calculating cost of sales for both goods/products and services. How you approach your cost of sales depends on whether your business sells goods or services. It’s important that you track the costs to ensure that you’re always profitable. Cost of sales, sometimes known as cost of goods sold (COGS), is simply the cost involved in directly producing the goods or services that you actually sell.
