What is service costing?
Service costing is the process of identifying all costs associated with building, supporting, and delivering your service. Examples of service cost components include equipment, staff labor, professional fees, software, license fees, and data center charges, to name just a few.
Why do I need to cost my service?
Costing your service is essential for the following reasons:
- Costing is foundational for developing a meaningful rate that will help you meet your financial goals. You cannot develop a rate unless you understand how much it costs to provide your service.
- Costing provides a financial benchmark to help you manage and improve your service. For example, if service costs unexpectedly increase, you have a basis from which to quickly identify the source of the increase. We recommend costing your service even if you do not plan to charge for it.
How do I cost my service?
See the chart below for instructions on costing your service.
| I want to: | Here’s how: | When: | Who is responsible? |
|---|---|---|---|
| Cost a new service or recost an existing service |
Download and complete the Service Costing and Rate Development Model template. Request help costing your service |
As soon as you start service development to ensure availability of a financial analyst to help you. | Service manager and operational staff who can provide input into service costs |
