In some industries (e.g., professional services like accounting or legal), the labor associated with delivering the services to the client are not considered COGS; they are considered simply as expenses. In other industries (e.g., in defense contracting or tour guides), the labor associated with delivering the services to the client are considered COGS. You have many choices in Offtoa:

1. If you choose to model the client-facing labor as expenses, not COGS:
   1. If the labor are employees of your company, then simply enter the personnel as employees on the Assumptions/Costs/Personnel/Employees page. Under the Advanced Settings, make sure the Expense Percentage is set to 100%.
   2. If the labor are contractors, enter their annual cost as an expense on the Assumptions/Costs/Other Expenses page. Set the Calculation Rule to either Billed to G&A or Billed to M&S.
2. If you choose to model the client-facing labor as COGS, not expenses:
   1. If the labor are employees of your company, then simply enter the personnel as employees on the Assumptions/Costs/Personnel/Employees page. Using a separate spreadsheet, calculate what percentage of their time will be spent delivering services to clients. Then, under the Advanced Settings, set the Expense Percentage to that percentage.
   2. Or, alternatively, calculate (one time) what the fully loaded cost (salary plus benefits) is for each hour of labor to deliver the services to your customer. Then consider this to be a “raw material.” Then on the Assumptions/Costs/Cost of Goods Sold page, associate the appropriate number of hours of this “raw material” with each product.
   3. If the labor are contractors, calculate the cost to you for each hour of their labor to deliver the services to your customer. Then consider this to be a “raw material.” Then on the Assumptions/Costs/Cost of Goods Sold page, associate the appropriate number of hours of this “raw material” with each product.

Related Questions:

What are the various 'units' that Offtoa asks for?

How do I relate raw materials to products/services I sell?

Where do I enter/change raw materials?