Accurate CoGS calculations – From mystery to mastery in complex businesses

03 Jun 2024

If your business is involved with the manufacturing and/or fulfillment of products, one crucial element often eludes businesses: accurate tracking of the cost of goods sold (COGS). This elusive figure, comprising not only direct production costs but also incidental expenses like logistics, customs, and value-added services, plays a pivotal role in determining the profitability and sustainability of businesses. Yet, for many, the complexity of incidental costs poses a barrier to achieving accurate COGS calculations.

At the heart of this challenge lies the inability to effectively track and apportion incidental costs for each product or batch. Without a means of allocating these costs alongside purchase costs, businesses are left grappling with a distorted understanding of their true cost structures. As a result, gross margin calculations become a guessing game, fraught with inaccuracies and inconsistencies.

However, there is a solution: businesses need a robust mechanism for apportioning incidental costs along with purchase costs for each product or batch. By implementing a systematic approach to cost allocation, businesses can gain clarity and precision in their COGS calculations. This change paves the way for a transformative outcome: accurate COGS calculation, empowering businesses to better manage gross margin and GM variability.

Are you finding it challenging to track your cost of goods sold (COGS) due to the intricacies of incidental costs like logistics, customs, and value-added services? Perhaps you’re grappling with the complexity of apportioning these costs along with purchase costs for each product batch accurately. If so, you’re not alone.

This is where we help our clients to have a clear means of apportioning these incidental costs for every good or batch produced. Picture having precise COGS calculations at your fingertips, empowering you to make informed decisions and manage gross margins and variability with confidence. How would it feel to finally have mastery over your COGS, transforming it from a mystery into a valuable asset for your business?

Consider the ripple effect of accurate COGS calculations on your bottom line. How could it streamline your operations, improve your financial performance, and position your business for sustainable growth? 

At Workhorse, we understand the challenges you face. That’s why we’re dedicated to providing solutions that simplify the complexities of inventory management and empower businesses like yours to thrive. If you’re keen to find out more about how we might be able to transform the mystery of COGS in your business we’d love to jump on a call. Feel free to pick a time that suits via Calendly.

Ready to transform your inventory management?

Ditch the spreadsheets and provide your team with the tools they need to make better inventory decisions.