As an agency focused CFO, I like salaries involved in production to be included in COGS. In my view, it helps an operator understand if they are being efficient enough in their delivery, and if they have too many non-billable roles. Nonetheless, I understand this can be confusing to manage from an accounting standpoint if you don’t have someone handling your books that really knows what they’re doing. Overall, great breakdown! Thanks for sharing!
Appreciate the comment Paul. I've seen it done both ways and my biggest takeaway for agencies is to stay consistent with what they put into COGS. I have my preferences (as you can tell from the article) but the key is to stay consistent.
As an agency focused CFO, I like salaries involved in production to be included in COGS. In my view, it helps an operator understand if they are being efficient enough in their delivery, and if they have too many non-billable roles. Nonetheless, I understand this can be confusing to manage from an accounting standpoint if you don’t have someone handling your books that really knows what they’re doing. Overall, great breakdown! Thanks for sharing!
Appreciate the comment Paul. I've seen it done both ways and my biggest takeaway for agencies is to stay consistent with what they put into COGS. I have my preferences (as you can tell from the article) but the key is to stay consistent.