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QUESTION DETAIL
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We have a landscaping business in Florida. We are wondering if we're accounting for salaries appropriately in the cost of goods sold line item. Please confirm.
ANSWER
The BIDaWIZ Team's Answer:
For a landscaping company, the field wages are considered direct labor and included as part of COGs. In addition, any other costs such as payroll and insurance for field people are considered the labor burden and are also incorporated as part of the COGs.
However, sales, accounting, operations, marketing, and administrative personnel would be considered overhead and part of G&A. Thus, the accounting treatment depends if the personnel are in the field or serve an administrative function.
