Home
>
Small Business
>
Is Your Business Profitable?

Is Your Business Profitable?

What's your job profitability? Do you know?

Many business owners are unsure of their profitability at a company or job level. They "think" they are making money because they have a few dollars in their checking account. Having money in your checking account doesn't mean you are profitable. It might simply mean you haven't paid all the bills yet, so you have a little cash. Cash and profit are two different concepts. If you don't know your exact income and expenses for each job and your overall business, then how can you know whether you are making a profit? And, if you aren't profitable, your business won't last long.

Analyze Each Job

Regardless of the size of your business or your industry, profitability is something you should be monitoring on a monthly basis. To determine your profit, you must know how much you make and spend on each job. Expenditures should be tracked for direct labor and material costs on each job. In addition, you should also be tracking overhead costs and allocating them to your various jobs as applicable. There is always going to be some general overhead, but too often dollars are thrown into general overhead, when those dollars could easily be attached to specific jobs.

Intuit's QuickBooks software program has easy-to-use features that allow you to do job-costing for time and materials, so you don't have to worry about having to track it all manually. Rely on tools to help you run your business more efficiently and effectively.

Are you curious how you are doing with job costing measurements? Here are some quick and easy questions to gauge your job costing performance:

1. Do I track each customer's revenue information through a detailed invoice?

2. Do I have a way of breaking down my direct job materials cost by customer?

3. Do I associate all time spent to each job accurately with actual dollar amounts?

4. Do I have access to reports to monitor profitability on each job in a timely manner?

5. Do I have a way to trend the fluctuations in job profitability from job to job, month to month, etc?

If you answered "no" to any of these, then it's time for you to take an objective look at your financial goals. It's time for you to implement a job costing mechanism to help you answer "yes" to all these questions. How can you track your profitability and long-term growth plans if you don't have detail at a job level?

QuickBooks Can Help

Here are some easy ways to utilize QuickBooks effectively to help you with your job-costing process:

1. Set up the QuickBooks Item list so that you'll have both an expense and an income aspect to each of the items. This will allow you to track your costs and your income, and will provide you profit by item.

2. Record your sales through the invoicing or sales receipt process. This will record the income aspects of the items.

3. As you purchase the product or service items, make sure that you utilize the Items tab so that it will record the cost to the appropriate item. In addition, make sure to assign your customer/job information to each line item so that you'll have the costs associated to the appropriate customer/job for job-costing.

4. Utilize the time-tracking mechanism in QuickBooks so that you and your employees can track time by item and customer/job. No dollar value is associated with this time until you actually pay the employees within QuickBooks.

5. QuickBooks has preformatted reports that you can access to have job-costing information right at your fingertips. These are found under the Reporting menu and the Jobs/Time/Mileage option.

6. QuickBooks has the ability to provide reports for any time period you select. This will allow you to have a variety of detail over the growth of your business and to produce trending reports. You can modify the report as needed to meet your needs.

A good accounting professional can help you understand what these reports are telling you, in terms that you can use. Reports alone don't provide value if you don't understand them. So it is key that you understand the reporting information and how you can use that information to assist you in decision-making as you grow your business profitably.

Job-costing is easier when you set-up your accounting/bookkeeping software package and know how to use it. So, challenge yourself today to become more adept at running a financially savvy business through job-costing. Then, you'll know, without a doubt, whether your company is profitable.

Pam helps business owners keep money from slipping through their fingers. She is a Certified Management Accountant, Certified QuickBooks ProAdvisor, and Author of Out of the Red and Unlocking the Secrets of QuickBooks. For more information, you can visit our website at http://www.quickbooksinformation.com

Cadillac Deville rentals Bingham .. Lockport Chicago limo O’Hare

In The News:

Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.

Tech expert Kurt “CyberGuy" Knutsson says a new autonomous AI is a game changer that also raises privacy risks. Is your data safe?

Tech expert Kurt “CyberGuy" Knutsson says robots and drones are revolutionizing fruit farming with faster picking and smarter handling.

Landmark Admin revises May 2024 cyberattack scope to show twice as many people were affected. Kurt “CyberGuy" Knutsson gives tips to help stay safe from an insurance data breach.

Tech expert Kurt “CyberGuy" Knutsson talks about how Yamaha’s hydrogen outboard motor could revolutionize boating with zero emissions.

Tech expert Kurt “CyberGuy" Knutsson reveals how to memorialize or remove a deceased loved one’s Facebook account and protect their digital legacy from misuse or scams.

Tech expert Kurt “CyberGuy" Knutsson says an Apple Watch saved psychiatrist Amanda Faulkner by detecting deadly leukemia early.

Scammers and fraudsters are increasingly targeting the most vulnerable, especially nursing homes and the personal data of their residents. Kurt the CyberGuy has safety tips.

Infected USB flash drives can spread malware among multiple organizations in ways that can easily bypass traditional security systems.

With a fully automated warehouse system and AI-powered robots, Ocado's Hive picks, packs and delivers grocery store orders in just a few minutes.

Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.

Recycling robots are using artificial intelligence to learn how to sort recyclables by recognizing patterns in colors, textures, shapes and logos.

The Reachy 2 robot is designed to be friendly and approachable, inviting natural interaction and is perfect for research, education and experimenting with embodied AI.

Kurt "CyberGuy" Knutsson shares several easy ways to keep your credit cards safe from digital thieves while you're traveling this summer.

Arcturus sets up cameras around the edges of baseball stadiums to capture real-time action and generate a 3D digital clone of the game.

Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.

The CyberGuy explains why healthcare organizations are vulnerable to hackers after there have been a half dozen data breaches this year.

Developed at two California universities, the innovative technology combines brain-computer interfaces with advanced AI to decode neural activity into audible speech.

Microsoft patches 12 critical flaws, but six have already been exploited by criminals. Kurt “CyberGuy" Knutsson says updating your system is only a short-term fix.

Tech expert Kurt “CyberGuy" Knutsson discusses how robots can milk, feed and clean cows on dairy farms, boosting efficiency and comfort.

Tech expert Kurt “CyberGuy" Knutsson says quantum internet ensures unhackable security and redefines online privacy and speed.

Kawasaki's CORLEO is a hydrogen-powered, AI-driven rideable robot. Tech expert Kurt “CyberGuy" Knutsson reports on this new way of thinking about off-road transportation.

The CyberGuy breaks down five mobile privacy terms that could make a difference when it comes to keeping your personal information safe.

A groundbreaking robot that's like a real-life Wall-E uses advanced artificial intelligence to replicate natural gestures and deliberate actions with striking accuracy.

If not properly managed, Windows Defender Application Control, a security feature with Windows, could be a potential security vulnerability.

Is Your Business Profitable?

Small Business