| Profit Enhancement
System A simple system proven to
increase profits
If you were able to enter 5 typical
invoices details on a weekly or monthly
basis, chances are you could make yourself
more profitable
Enter: (for each invoice)
- Invoice No
- Gross Revenue
- Material Cost
- Subcontract Costs (if any)
- No. of hours (or Units of Work)
(The system includes input templates for
the easy entry of this information and
produces tabular reports of the
calculated information)
By entering the revenue from typical
invoices, together with the Material Cost,
Subcontract costs and the number of hours
worked (or the number of work units* used)
the system will calculate the average rate
of gross profit per hour or unit.
Do this for a set of typical invoices in
a week or a month and the system will
calculate the average gross profit rate per
hour/unit
Previously the system would have asked
you to enter your sales estimate or target
for the year, the cost of materials
purchased and estimate of total expenses for
the year.
In addition it would ask you to enter the
number of total hours or units available for
the year e.g. 5 staff at 7 hours per day X
240 working days per year equals 8400 hours.
* The system can be also applied to work
units, e.g., table covers in a restaurant,
rooms occupied in hotel, trips made in car
hire, etc.
From the above information the system is
able to calculate the number of hours/units
needed to attain the estimated sales target
for the year (by dividing the average G. P
Rate into the Target Sales).
Almost without exception this figure of
hours/units is far less than the number of
total hours/units available per year
It is only necessary to multiply the
average gross profit rate attained from the
invoices by the number estimated annual
units, to calculate the amount of Gross
Profit that can be attained if work
efficiency were improved. In our example
it's raised to £12,000 compared to £6,000
Gross Profit.
The system will extrapolate these figures
into a Report of Key Performance Indices
which can be compared to "What-if"
strategies by returning to the first screen
and entering New Scenarios and new
Productivity percentages.
Doing this on a regular basis it has been
proven will improve profits
|
