Variable Costs are inconstant expenses that your business may incur during operation.

Think about this: if you have to pay 5 percent of your revenue as a commission, then this expense is a variable cost.

Depending on your business, those costs can be insignificant or not. Still, failure in calculating them may lead to inaccurate financial reporting.

With TrueProfit, you can now add and adjust Variable Costs in the Custom Spend feature.

How to add new variable costs

Go to Custom Spend - Variable Costs - New Cost.

There you can set up relevant information including Name and Formula (compulsory), Starting and Ending Dates.

Currently, in the Formula section, you see a dropdown menu with formulas that link to Revenue, Profit, Facebook Ad, Google Ad and Order. Simply put in a value to determine how you would like your variable cost to be calculated.

For example, if you outsource your Facebook Ad Campaign to an agency, and they charge you 10 percent of Facebook Ad Spend, then just drop down the menu and select % Facebook, enter into the box the value (10).

Not sure where to put your expenses?

Any costs that don’t fall into other existing categories in TrueProfit will be kept here at Custom Spend.

The ones under formulas (i.e. costs depending on certain variables) will be tracked in Variable Cost. In contrast, Fixed Costs are where you set up expenses by inputting predetermined amounts.
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