Time for Advanced SaaS COGS. COGS vs OpEx is so important to get right.
But what if we have multiple revenue streams? Our COGS section must align with this.
Quick guide. #saas
But what if we have multiple revenue streams? Our COGS section must align with this.
Quick guide. #saas
What departments are included in pure-play SaaS COGS?
For pure-play SaaS, your COGS structure should include:
1⃣Technical Support
2⃣Professional Services
3⃣Customer Success
4⃣Dev Ops
Of course, CS is up for debate depending on their role.
Dev Ops = Cost of Ops in my example
For pure-play SaaS, your COGS structure should include:
1⃣Technical Support
2⃣Professional Services
3⃣Customer Success
4⃣Dev Ops
Of course, CS is up for debate depending on their role.
Dev Ops = Cost of Ops in my example
What if we have more than just subscriptions and services?
It's very common in SaaS to have subscriptions, services, and variable revenue streams.
I had one client with all but managed services in the pic below.
It's very common in SaaS to have subscriptions, services, and variable revenue streams.
I had one client with all but managed services in the pic below.
How to Set Up COGS with Multiple Revenue Streams
We must have clear line of sight on the departments delivering revenue. Our COGS setup is dictated by our revenue streams.
We must have clear line of sight on the departments delivering revenue. Our COGS setup is dictated by our revenue streams.
Gross Margins by Revenue Stream
With the setup above, we can easily calculate margins by revenue stream. Which revenue streams are contributing to profitability?
Just a mapping exercise then.
With the setup above, we can easily calculate margins by revenue stream. Which revenue streams are contributing to profitability?
Just a mapping exercise then.
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