The Importance Of Tracking Costs
A client of mine started an equipment repair shop with some friends without putting much thought into what costs might be incurred to repair these computers.
Although some costs are straight forward to account for, like parts and rent, other costs like labour time and overhead allocation are not simple to track or put a dollar value to.
These are the costs that ended up bringing my clients business to the brink of failure. Without being able to track their labour costs since they felt they were working for free, or allocating overhead costs to each repair they did, the company didn't realize they were losing money on each of their repairs.
By allowing Navion to come in and analyze the true cost of their service, my client was able to quote clients correctly and maximize profits.
Knowing these costs lets business owners track profitability on a per-job level. This allows owners to determine where efficiencies need to be found and find ways to become more profitable.
It also gives estimators knowledge for future projects for what to quote customers. Did you lose money on the last job? Why? How much do you need to charge this time?
Costing is an efficient way to increase profitability and make sure your business is set up for success. Contact us to see how we can help you through this process.