Posted on 15 Aug 2017
I beat my son on Wii Golf the other day 40-47 on 9 holes. At first glance, one might think that my son is awful, while I am the next Rory McIlroy. The numbers are convincing. On average I beat him by a stroke on almost every hole. I could market this version of the truth and sell it to a naïve buyer. But let’s dig deeper before we make the purchase. How did we compete on a hole by hole basis? Ah… a different story comes to light. I only beat him on 5 holes. He beat me on 4. It was a tight match until the last hole and he was ahead going into it. The 9th hole was a train wreck for him. As a small business owner, you may ask yourself the question, are your numbers as good as you think? This question may create some uneasiness if you don’t have good job cost reports.
Some small business owners may look at the end of the week numbers and think that life is good. They made payroll, paid all of the bills, and there’s money left over for groceries. Time to uncork the champagne, right? What if you could dive deeper into the numbers? Let’s say that you have 10 customers and you could easily run the numbers for each one. The analysis reveals that you’re losing money on 5 customers, breaking even on 2, and only 3 are profitable. These 3 customers are profitable enough to bring your total bottom line into the black, which disguises your problem with the 7. But in-depth job by job cost reports aren’t easy to get – unless you use our online employee time clock for labor hours.
Our time clock app and employee call in system allows your employees to clock in and out of different jobs. You get accurate hours for payroll, and for job cost reports. The Weekly Labor Cost report is a job cost report that breaks down total weekly hours by job, and then by employee. See how many weekly hours were worked at each of your 10 customers compared to their budgeted hours. The report also shows the labor dollars spent at each job site. Compare the dollars spent against the dollars budgeted for each job. And because this is a WEEKLY job cost report, you catch any issues quickly. The report shows if any employees hit overtime on these jobs. Not just overtime, but on which job and how many overtime hours on each job. This is extremely valuable information. Overtime hours cost you at least 1.5 times more at these jobs. Just shift your employees around to avoid overtime next week.
One final golden nugget is that the Weekly Labor Cost report allows you to enter a labor rate multiplier to get a REAL labor cost for each job. You may pay $9 an hour, but that’s not your total cost. Add in 7.65% for your share of the payroll taxes and maybe 2% for worker’s comp, and that $9 an hour employee is really $9.87 per hour. If you neglect to factor in these numbers, you will be about 10% off across the board.
Our Weekly Labor Cost report eliminates the uneasy feeling that guesswork causes and gives you enlightened, true numbers that help you understand your small business better. This job cost report provides targeted, real data that is broken down and helps you devise a plan of attack for the rest of the month. If you need a clearer grip on the “real” truth about your business that accurate job cost reports can provide, sign up for a free trial with us.
Legendary golfer Ben Hogan said, “The most important shot in golf is the next one.” This may be true of your next business decision, also.
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