What expenses go into your Cost of Sales?

What expenses go into your Cost of Sales?

Your cost reporting doesn't sound right

People cost should be split by department, and Cost of Sales should include all costs relating to service delivery.

This means it's unlikely you have an accurate picture of your Gross Margin - a crucial metric for SAAS companies. 

This is a common problem, and often leads to difficulties in raising investment / running out of cash when trying to scale. 

Nice! That sounds correct

People cost should be split by department, and Cost of Sales should include all costs relating to service delivery.

It sounds likely you are doing this right!

How confident are you in the accuracy of your cashflow forecasts?

That could be a problem

It's really important to do regular, accurate cashflow forecasts.

If not, you'll likely either: 

Grow slower than you otherwise would - because you're not confident enough to invest, or

Run out of cash sooner than you expect

Nice! that sounds right

It's really important to do regular, accurate cashflow forecasts.

If not, you'll risk: 

Growing slower than you otherwise would - because you're not confident enough to invest, or

Running out of cash sooner than you expect

Marathon Accountants are specialist accountants for UK-based SAAS startups.

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