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Cost of goods sold - Help! Watch

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    Hi All,

    I am pretty new to this as it's never been my forte in the past. I am setting up a business and am trying to work out my sales forecast, profit loss, cash flow etc.

    Do you include VAT charged by a supplier in the cost of goods sold for a sales forecast? Also, I'm aware that these costs relate to the direct production of your goods, so would things like product label count as direct?

    Any help would be much appreciated.

    Thanks
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    Perhaps you'd be better posting on a business forum? Your questions are quite specialised.
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    (Original post by FK)
    Hi All,

    I am pretty new to this as it's never been my forte in the past. I am setting up a business and am trying to work out my sales forecast, profit loss, cash flow etc.

    Do you include VAT charged by a supplier in the cost of goods sold for a sales forecast? Also, I'm aware that these costs relate to the direct production of your goods, so would things like product label count as direct?

    Any help would be much appreciated.

    Thanks
    Assuming you wont make enough to be VAT registered in your first year you should consider any VAT on things you're purchasing as just part of the cost of the item.

    In terms of sales do all your modelling with and without VAT because without VAT tells someone about your margins and with VAT obviously tells you the price that will actually be incurred.

    Labels would count as a direct cost.
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    http://en.wikipedia.org/wiki/Cost_of_goods_sold
 
 
 
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