Does your job costing often feel like guesswork, or just a bit of a hit or miss altogether? If your costs are amiss, chances are your prices and margins are way off as well.
While it can be tedious to sniff out costing issues and service variations, you need to fix them because if you don’t, they will continue to fester and get uglier! But what’s the fuss, you ask? Well, it’s all about your profit margins.
Job costing can be easy if you have the same type of job each day, the same type of clients, that require the same tools that never need to be replaced. However, you know as a tradie that this isn’t always the case. So, to help you, here are some things you could be doing wrong in your costing as well as tips on how we can sort it.
Let’s admit it – you don’t always have the exact amount at hand, and sometimes it can be really tempting to guesstimate instead of calculating costs correctly. You might be able to get away with a few guesstimates a couple of times but if this turns into a bad habit, your profits can take a nosedive, and it will be difficult to trace back – especially now with all these supply shortages, price increases, and tighter margins!
The trade space has been super busy lately, and there’s more work than time to manage projects! But regularly delayed inputs can cause errors, especially if it takes you days or weeks to collect the paperwork needed to be updated into the system. You might be on site all day and as you catch up on paperwork by the end of a hard day’s work, you might forget some items here and there. Humans have the tendency to forget details and it is important to recall incorrect inputs as they happen to help ensure you’re maximising your profit.
Abbreviations and acronyms can save you time but only if your team are all on the same page. If a new employee manages data entry or an old employee doesn’t know what all these abbreviations mean, it can be downright confusing. Keep a note of your abbreviations and your job costing will benefit from it.
Now that your labels are clear, you still need to make sure all information is entered in the correct field and with legible handwriting! Check your fields and see if you can make them even more clearly defined. Checkboxes are a good way to lessen handwritten entries.
Trade business accountants
Is your workplace already paperless or do you still need to go through a gazillion paper forms? If it’s the latter, then you’re no stranger to double entries and errors! It might be time to look into a good software system that would best fit your trade business. Whether your forms are digital or still on paper, you still need to design them to collect information correctly. It must be user-friendly to strip off human error as much as possible.
If you think you can still improve your forms and need a different accounting system, sing out and we’ll give you a buzz. We provide services in taxation, bookkeeping and business advisory specifically to tradies – and we’re pretty darn good at it.
Your Outside Team
Address: Level 2, 182 Vivian Street,
Te Aro, Wellington 6011, New Zealand
Mail: PO Box 24-457, Wellington 6142
Phone: 04 889 2975