Cost of Goods Sold for Landscaping Business – Explained

What Is a Landscaping Business?

The landscaping business provides lawn services to clients to keep their yards groomed. The services of landscaping also include planting of flowers, trees and shrubs. Landscapers are the workers who do landscaping services.

They know to plan flowerbeds and gardens to raise the value of a property. When a customer hires a landscaping company, he has to pay for manual labour as well as landscapers working knowledge of plants and flowers that would increase the property value.

There are various types of landscaping business as well. They can engage themselves on residential works as working on lawns or even doing private works for commercial businesses. The public parks and golf courses are the big source of revenue for landscaping business.

A rare breed of landscaping business would be that of crews who mow the sides of roads and plant flowers and maintain those premises.

Professional landscaping businesses do their jobs quickly and move into another. These landscapers own professional weed trimmers, chainsaws, tillers and various high-quality tools. The large landscaping business would have proper crews with designated leaders for the site with responsibility assigned.

Cost of goods sold for a landscaping business

The framework for landscaping business has been now discussed, we step next to what constitutes cost of goods sold for landscaping business. Cost of goods sold is the carrying value of goods sold during a particular period.

As the landscaping business models are based on service models, COGS also equate to cost of services rendered. Landscaping for residential applications includes mowing the lawn; weed trimming; planting flowers, shrubs and trees; and trimming hedges and trees.

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A good landscaper creates hedges and adjusts the height to elevate the attractiveness of the property. Landscaping businesses will often fertilize plants and grounds as well.  However, the service still requires some sort of supplies. The various expenses in providing cleaning service are as follows:

A) Supplies to assist landscaping services

These are the products that would be needed to perform landscaping services. This would include the following:

  • Cost of regular shovel repairs
  • Cost of bags and trash bags
  • Cost of plants and flowers
  • Cost of disinfectant chemicals
  • Cost of spray bottles to water plants in small pts
  • Cost of floor cleaner in the garden
  • Cost of stain remover
  • Cost of wood cleaner

All the above supplies can be effectively categorized into essential gardening landscaping and lawn landscaping services. There are commercial landscaping services but not much of supplies are used there which can be included in cost of goods sold.

All the supplies made in commercial landscaping are of high expenditures and the equipment used therein are also heavy fixed assets.  The professional expertise of landscaper along with is essential for the success of a good cleaning company. All the above costs are also considered as the cost of supplies or cost of direct materials for cleaning business.

B) Cost of labour

Even if the landscaper is providing pruning brush services or installing a deck, the client will need to know how much the cost will be upfront. Hence, the landscaping business has to make an elaborate decision on how much it is going to charge its clients for certain jobs. They may use various software packages like CLIP and landpro developed for landscaping business.

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Cost of labour is a major component of landscaping service. This is what the landscaper would provide on the basis of professional expertise. Cost of labour is computed by charging hourly rates for actual hours worked. The first step in landscaping business is to make a formal visit to client premises.

The company shall estimate the size of the premises to be serviced and the type of landscaping service they would need and the contract period. The amount of time and the number of workers needed to work on-premises also need to be estimated.

The number of hours will vary on the type of contract the client wants. The final step would be to establish hourly rates. This will depend again on the type of services required by the client. To decide the cost of labour in providing services, the company has to also consider industry practices along with regulations applicable to them.

Statement of Cost of Services Rendered

Landscaping Company

ParticularsAmount ($)Amount ($)
Beginning inventory of suppliesX 
+ PurchasesX 
-Purchases returnsX 
+ Direct laborX 
Cost of goods and services XX
-Ending inventory (X)
Cost of services rendered/ COGS XX