“Wrong Gross Profit Means Wrong Decisions.”

I've sat across from a lot of business owners who think they know their gross profit.

Most of them are off. Sometimes by a little. Sometimes by a lot.

The most common reason: technician labour, delivery costs, and vehicle expenses sitting in operating expenses instead of cost of sales. It looks tidy on the P&L. But it means the GP number they're making decisions from isn't real.

I've seen this shift a business from apparent 55% GP to actual 38% GP once the lines are in the right place. That's not a rounding error. That's a different business.

The test that fixes it fast: for every cost on your P&L, ask if we hadn't done that job, would this cost have happened? If yes, it belongs in cost of sales.

Run that across your P&L once. You might not like what you find. But you'll finally be working from the right number.

What does your cost of sales actually include?