Accounting for stitch count fees

For embroidery products, stitch count fees are usually calculated using either Per Stitch or Fixed Cost pricing. More details on pricing your embroidery products can be found here.

Design costs or "costs per stitch" should not be included in your recipes or in your manufactures as they will then be included in your inventory valuation and thus your COGS.

As COGS calculations should only include materials, this will lead to incorrect end of year tallies.

If you use a Fixed Cost approach, this will already be factored in via the recipe (bill of materials) that you create for each of your pieces.

To ensure that you have included service costs in your pricing guidance you could consider increasing your labor rate or markup percentage to reflect this additional service charge.

If you are adding embroidery designs on products that customers bring to you, such as monogramming, this would be considered a service rather than a manufacturing process. To ensure that this revenue is captured within Craftybase, you can add a product to allow adding this cost as an order line item - it is not required to manufacture this product.

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