Direct costs in the world of freelancing are expenses that can be directly attributed to a specific project or client. These costs are typically incurred in the process of delivering a product or service to a client and are necessary to complete the work. Direct costs are sometimes referred to as “cost of goods sold” or “COGS“.
Examples of direct costs for freelancers include: materials and supplies, subcontractor costs, shipping and delivery costs, travel expenses, or equipment and tool costs.
By identifying and tracking their direct costs, freelancers can better understand the true cost of delivering their services to clients. This can help them price their services accurately, estimate project costs more effectively, and ensure that they are making a profit on their work.