How to Configure Your Variable Costs in AskBiz
Understand the difference between fixed and variable costs, and learn how to enter each variable cost category in the AskBiz Cost Configuration Drawer.
Key Takeaways
- Variable costs change with your sales volume or business activity — they are not the same every month.
- AskBiz provides six default variable cost categories including sales commissions, shipping, and ad spend.
- Use a recent monthly average for variable costs so your burn rate reflects typical operating conditions.
Fixed Costs vs Variable Costs: The Core Difference
Fixed costs stay flat regardless of sales. Variable costs move with your business activity. If you sell more, you typically spend more on shipping, pay more in sales commissions, and possibly run more paid ads. If sales slow down, those costs shrink. This distinction matters for the CFO dashboard because variable costs represent the spending you can influence in the short term. When you need to reduce your daily burn quickly, variable costs are where you act first — pausing an ad campaign, renegotiating commission structures, or finding a cheaper fulfilment partner all reduce variable costs without affecting your core infrastructure.
How to Enter Your Variable Costs
Step 1: Open the Cost Configuration Drawer from the CFO dashboard. Step 2: Tap the Variable Costs tab at the top of the drawer. Step 3: You will see six default categories: Sales Commissions, Shipping and Fulfillment, Paid Marketing/Ad Spend, Payment Processing Fees, Packaging, and Contract Labour. Each row has a label and a monthly amount field. Step 4: For each row that applies to your business, tap the amount field and enter your typical monthly spend. Because these costs vary, use your average from the last two or three months as the input. Step 5: Leave rows at zero or delete them if they do not apply. Step 6: Tap Save to apply your variable cost configuration.
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Start for free →Estimating Variable Costs Accurately
The key challenge with variable costs is that they change. The best approach is to use a three-month rolling average. Open your bank statements or accounting software, find the total spent in each variable category for the last three months, add them together, and divide by three. That average is your monthly variable cost for the dashboard. Revisit and update variable costs at least once a month, ideally on the same day you update your cash balance. If your business is seasonal, consider whether your current period is above or below average and adjust your entry to reflect typical operating conditions rather than a peak or trough.
Common Variable Costs to Consider
Beyond the six default categories, many businesses have additional variable costs worth tracking. Merchant processing fees (if not already captured in Payment Processing Fees) typically run 1.5% to 3% of revenue. If you use freelancers or contractors on a project basis, their costs belong in Contract Labour. Businesses that do any kind of physical product fulfilment often have packaging materials that scale directly with order volume. If you run Google Ads, Meta Ads, or any performance marketing, Paid Marketing/Ad Spend is one of your most controllable variable costs. When a cost clearly fluctuates month to month based on what you are doing, it belongs in this tab rather than the Fixed Costs tab.
How Variable Costs Affect Your Dashboard
Variable costs combine with your fixed costs to produce the total monthly cost figure. The dashboard divides that combined total by 30 to get your Daily Burn rate. If your fixed costs are $6,000 per month and your variable costs are $2,000 per month, your total monthly cost is $8,000 and your daily burn is approximately $267. If you increase your ad spend by $1,000 per month, your daily burn rises to approximately $300. This direct relationship means you can use the dashboard as a decision-making tool before you spend: enter a hypothetical variable cost increase, check how it changes your runway, and decide whether the trade-off is worth it.