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

becauseimnancy · ‎February 08, 2023

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!

Rainflurry · ‎February 09, 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.

View solution in original post

Rainflurry · ‎February 09, 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.

becauseimnancy · ‎February 09, 2023

Thank you for clearing that up.

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

FritzF · ‎February 20, 2023

Hi again, Rainflurry.

I appreciate you for always sharing your knowledge about QuickBooks. This will definitely help other users as well in the future. Please keep on posting here in the Community.

Keep safe and have a great rest of the day.

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