SaaS costs and gross margins: Which is CoGS and which is not
GAAP does not clearly define the term Cost Of Goods Sold (COGS). In effect, COGS is not mandated by regulation. Yet, for every organization, as SaaS count grows — to the second biggest expense after headcount — categorizing them as COGS or not impacts gross margins significantly.
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What’s inside this ebook?
In this ebook, we draw from our experience buying, managing and securing SaaS applications for the world’s leading organizations, to offer you a clear framework for segregating SaaS expenses into COGS and non-COGS.
- What is COGS?
- Why bother with COGS?
- What SaaS is COGS?
- What SaaS is not COGS?
- How to categorize SaaS expenses — the 4A’s model