Skip to main content
B
becauseimnancy
February 9, 2023
Solved

Digital Marketing Service Companies - Are Purchases To Service A Client COGS/COS or Expenses?

  • February 9, 2023
  • 1 reply
  • 0 views

Hello,

 

My company offers Digital Advertising Services. We don't have any inventory. 

 

When a client signs up/pays us, we purchase domains from a vendor, pay for ads from a vendor, etc. 

 

We pay for these purchases, not the client. 


Are these purchases recorded as COGS or as an expense? 

 

If they are recorded as an expense, what type of expense?

 

*Thanks for your help, I am losing my mind! 

 

 

Best answer by Rainflurry

@becauseimnancy 

 

They are expenses, not COGS.  COGS applies when you carry inventory.  You can set up/use whatever expense account is most helpful for you to track on your P&L. 

1 reply

Rainflurry
RainflurryAnswer
February 9, 2023

@becauseimnancy 

 

They are expenses, not COGS.  COGS applies when you carry inventory.  You can set up/use whatever expense account is most helpful for you to track on your P&L. 

    B
    becauseimnancyAuthor
    February 9, 2023

    Thank you for clearing that up. 

     

    The more forums I read about this, the more confused I got. 

    Terms & ConditionsAccessibility statement