The Dirty Secrets Behind SaaS Gross Margins

Episode notes

Your gross margin might not be telling the truth. In episode #327, Ben Murray exposes the seven “dirty secrets” that distort SaaS gross margins — from incorrect COGS coding to missing allocations for shared resources and misclassified expenses. Whether you’re a CFO, finance lead, or operator, you’ll learn how to clean up your P&L and get accurate unit economics that reflect your true performance and valuation. What You’ll Learn The 7 big offenders that make SaaS gross margins misleading. How to correctly code payment processing fees (Stripe, ACH, wire) under DevOps in COGS. The difference between internal-use software and third-party apps embedded in your product. How to classify customer success — adoption-focused vs. account management. Why demo and test environments must be allocated properly between departments. How to ensure fully burdened expenses (wages, taxes, benefits, bonuses) are coded correctly. The impact of co-mingled headcount on margins by revenue stream. Why department leaders belong in the departments they manage. Why It Matters For Founders: Clean accounting drives higher (or preserved) company valuation and investor confidence.