What is COGS?
COGS is the allocated costs involved in producing or acquiring goods that you sell. COGS is sometimes referred to as the cost of sales or cost of services. Included in this amount is the cost of the items utilized plus the direct labor costs to produce each of those items.
In a bouquet for a wedding, your COGS would be the flowers in the bouquet, any hardgoods added (ribbon, vase, etc.), labor, and wasted flowers (from over-orders or poor quality deliveries). Any costs not bulit into the product are excluded from the COGS, such as marketing expenses, overhead, and shipping fees.
You account for the COGS in your business’s profit and loss statement, where the COGS is deducted from your revenue to arrive at your business’s gross profit.
But I have an accounting software, why do I need a COGS software too?
Accounting softwares that create invoices are great. But for the majority of florists, they're just for invoicing and bookkeeping. That helps you report better but doesn't help you accurately invoice in the first place or recover waste. Without a COGS software to supplement, you aren't able to keep up with your actual product.
If you use a COGS software, like Curate, the software will automatically do the calculations to determine whether you'll have leftovers and you can build the additional cost of unusable flowers into the proposal cost or you can adjust your arrangements so you don't need those few flowers and minimize the cost of the flowers in a proposal. In some cases, you'll be able to make a 30 second decision to remove two Quicksand roses from a bouquet, which will save you $30 by allowing you to order one bunch less.
Additionally, if you do not adjust the quantity of flowers to fit the unit, a COGS software for florists will show you exactly how many stems you will have left over so you can make a plan for selling them to minimize your losses.
Curate is a COGS software designed for and by florists to help you minimize your financial losses while creating quick, easy, and beautiful proposals for weddings and events. Ready to see all that it can do for your business? Sign up for a 60 day risk free subscription.
Not quite ready to make the jump? Learn more about Curate.