After reaching out to one of our company advisors today about advice on software as a service (SaaS) financial metrics, I felt it would be prudent to start documenting them in a series of posts. SaaS, being a newer delivery model, when compared to traditional, installed software, isn’t as well understood with regard to financial metrics.
Generally, cost of goods sold (CoGS) for SaaS companies will include:
- Hosting and monitoring of the application
- Licenses and royalties for products embedded in the application
- Services related to on-boarding the customer
- Support and account management
- Credit card fees and commissions to partners