How much of every dollar you keep before operating expenses.
Gross margin is the percentage of revenue remaining after subtracting the direct costs of delivering your product or service (cost of goods sold).
Formula: Gross Margin = (Revenue − COGS) ÷ Revenue × 100
Gross margin is the first filter for business viability. If your gross margin is too low, no amount of growth will make the business profitable — you're losing money on every sale before you even pay for sales, marketing, or overhead.
Benchmarks vary wildly by industry: SaaS companies typically see 70-85% gross margins, while distribution businesses operate at 15-25%. What matters is your trend — is it improving, stable, or declining?
CentSight calculates gross margin from your actual QuickBooks data and tracks it over time. It flags changes early: a 2% margin decline over two months might seem small, but at $10M revenue that's $200K in lost profit annually. CentSight catches these trends before they become crises.