COGS means cost of goods sold: the expenses directly tied to producing the goods or services a company sells. In accounting, COGS usually covers direct labor, materials, and other costs that can be traced to a specific product or service, rather than general business overhead.
In cyber security, COGS matters because finance records can reveal how a technical workflow is actually being used. For example, AI model calls, human review time, and project-specific infrastructure may need to be separated from operating expenses so teams can tell whether a system is part of delivery or just internal support. That distinction helps with budgeting, auditability, and abuse detection: unusual usage inside a COGS-coded workflow can point to shadow AI, overbroad API access, or billing misuse. Clean COGS tracking also makes it easier to prove what was produced, by whom, and at what cost.