Are Your Current Projects Profitable?
Do you know if your current projects are profitable? You are working hard, making decisions on the go, and going above and beyond for your clients. Sometimes, due to workload or timing restraints, it is difficult to know if a project is going well or if something needs your attention. Revenue comes in and expenses go out, and it can be easy to lose track of the details. What if expenses come in after you have invoiced the client? Is there room in your budget for an unexpected shipping expense? You had a project budget, but are you on track? Do you know your profit margin? Your Business by the Book Account Manager can help you stay on track by creating a client profitability report to be reviewed monthly or quarterly. At a glance, this report can help you with decision-making on current and future projects.
We can add project or client profitability reports to your other monthly or quarterly financial statements. This report breaks down the income and cost of goods sold, and calculates your gross profit for each client. Examining this report on a regular basis is a valuable tool in maintaining or growing your business.
As you can see from the example of a Project Profitability Report for ABC Test Company, LLC below, Peachtree was not profitable for July 2020. Unexpected shipping expenses and other factors have caused ABC Test company to have a 10% loss. Because of this report, the owner is now aware and has valuable information to help her make good decisions. She can:
1.) Confirm the client Peachtree has been billed completely;
2.) Ensure that expenses were applied to this project correctly; and
3.) Verify she was not overcharged for a specific expense listed under Peachtree.
Discovering this information sooner rather than later can make it easier to address an incorrect charge from a vendor or an overage with the client.
We are always thinking of ways to help you save you money and succeed in your business. Ask your Account Manager today about adding this more in-depth analysis to your bookkeeping package. If you do not currently have a professional bookkeeper, we would love to talk to you. Contact us today for a free estimate for bookkeeping to meet your needs. We are here for you.
This post is meant for informational and educational purposes. It is not tax, legal, or financial advice. As always, Business by the Book recommends that you consult with your CPA regarding any tax questions.
