Margins

[michaiel]

I have some questions about the "Profit Snapshot" in the Options Window labeled "Check Profit" button...

1) Where do you enter your shop overhead (ie...rent, electricity, water, etc..) to figure out what your true "Overhead" is.
2) How does the program know what "Misc" is?
3) Which report do you use to see this for the Day? Week? Month? Year?

Thanks

[ricmorin]

You enter shop overhead at Setup>Standard Tables>Markup. You enter this a percentage, not actual figures.

Both Overhead and Misc. are calculated as a percentage of Parts and Labor dollars(also includes sublet). If one were to calculate how many parts and labor dollars they brought in last year, and compared that to all their fixed expenses as a percentage, that would provide a reasonable number to put there.

I use Misc. as what I want to see as a shop profit, therefore if my profit wheel comes to zero, I made my profit margin.

I print an Invoice Profit Summary as a part of my End of Day reports to see these numbers daily.

While this method provides some feedback (better than none), it's a bit flawed. The percentage changes based on how busy a shop is. If I had 2 dead weeks, my percentage goes up and if I'm straight out crazy my percentage goes down. There's no contingency in the software to gauge that. That's why I refine this number every year. I probably should do it monthly.

That gives me an idea on how to make the profit wheel more relevant(as a possible enhancement). Allow the software to accept input of monthly fixed expenses(a single entry per month) within the fiscal year and compare that with gross sales. Then the software uses the new percentage against all orders for the month, until another expenses entry is made. Hmmmmm. I suppose you could do this manually, but that's what software is for, eh?

[michaiel]

[quote="ricmorin"]You enter shop overhead at Setup>Standard Tables>Markup. You enter this a percentage, not actual figures.

Both Overhead and Misc. are calculated as a percentage of Parts and Labor dollars(also includes sublet). If one were to calculate how many parts and labor dollars they brought in last year, and compared that to all their fixed expenses as a percentage, that would provide a reasonable number to put there.[quote="ricmorin"]

How on earth do you determine Shop Overhead % and Miscellaneous Overhead % for your shop? I am a little confused?
Can we use some arbitrary numbers as an example?
Thanks for helping....

[ricmorin]

No problem.

Lets say that you average 40,000 dollars gross sales a month and you have 10,000 dollars in fixed expenses. As a ratio, your expenses are 25% of your gross sales. Enter 25% in Manager. Do not include things like cost of goods or tech pay.

The Misc figure can be used for anything you wish. I use it for a 20% profit the shop needs to make.

Does that help?

[michaiel]

Yes, thank you...I have been looking for a report that will show me the gross of each month and yearly. Could you point me to it please?

[ricmorin]

I think the most enlightening report for that is the Business Summary report. You can date range that to anything you like. Find it as the first report under the Management tab.

[michaiel]

I think the most enlightening report for that is the Business Summary report. You can date range that to anything you like. Find it as the first report under the Management tab.

Thanks...what does A/R mean?

[ricmorin]

That would be Accounts Receivable.

[michaiel]

thanks

[michaiel]

Do you use
Display Information as...

Mark up or Profit?

[ricmorin]

Do you use
Display Information as...

Mark up or Profit?

Mark up.