You need to know your numbers. To control your business performance, you need to understand your gross profit, stock management and cash flow forecasting. When you charge for a job, you want to cover your labour, materials and overheads, and of course about 10% net profit. This can be used to buy a vehicle or pay off debts.
However, many trade businesses struggle to get that 10%. The trade industry is competitive and pricing is often dictated by the market. Of course you can’t charge much more than the market average but you can make more profit by maximising your billable hours and keeping your costs at a minimum. A business performance dashboard will help you do that.
A lot of trade businesses struggle to make a good margin and even more don’t know the margin they’re getting. A business performance dashboard will give you more visibility over your key figures and help you increase your margin. It focuses on your business financial and operational metrics like gross and net profit, chargeable hours, margins on materials, and overheads.
You can make Xero talk to your business performance dashboard as well. Doing this will allow you to see how changes in your operational metrics affect your bottom line. For example, if you change a cost in your business, your business performance dashboard will show you how it impacts your net or gross profit.
If you reduce a cost, the tool will take all metrics into account and calculate how much your net profit will increase. If you want to increase margins, the Business Performance Dashboard will show you which business area you should modify to increase your chargeable rate and reduce overheads.
The goal is to improve your profit so you can keep more cash in your pocket.
As you look for different ways to grow and improve your business, seeking professional advice could prove to be an important and helpful decision.
You can click here to speak to a business, accounting and bookkeeping firm. We also offer hospitality business consultation and mortgage services. We will give you a call to know more about your needs. We will explain to you how we can improve your business.
We would love to help you formulate investment strategies and streamline your processes to take your business to the next level. Our goal is to help you grow your business, find ways to invest more and increase your productivity.
Phone: 1300 328 855
Office Address: 902 Howitt Street, Wendouree, Victoria 3355, Australia
Postal Address: PO Box 2234, Bakery Hill, Victoria 3354
Sky Accountants Gisborne & Macedon Ranges
Phone: 03 97444522
Office Address: 45 Hamilton Street, Gisborne, Victoria 3437, Australia
Postal Address: PO Box 270 Gisborne Victoria 3437