Failing to Plan is Planning to Fail – Quote & Print Business Review

Ben Hamnett CPA, of Printec Solutions, knows what it takes to make business profitable and how Quote & Print can help. He asks, "Which car are you planning to drive next year?"

Far too often business owners fail to adequately monitor business performance.  It is true however that many business operators have a ‘gut feel’ as to their business performance, often using cash flow, number of orders, WIP or a quick ratio of working capital to determine financial strength of the business.

The implementation of a Management Information System such as Quote and Print is essential to drive business profits.  The ability to timely and accurately monitor the profitability can often be the difference between a successful profitable business and a ‘just average’ performer.  It’s not just a matter of achieving adequate margins on jobs – but of asking whether greater margins are possible? If you are always winning jobs purely on price its even more important that you have accurate costing information.  If you don’t know what it’s costing you to print then how do you know what to quote or charge the client?
 
Additional questions you should be asking yourself are:

Do you as an estimator or business owner regularly monitor job reports to determine job profitability?

Does your MIS have the flexibility to report actual v estimate, for each cost centre, machine, employee or process?

Do you know where your strategic advantage lies within your business? 

Are you able to quickly determine if you are under-recovering the cost of your machines in each job. 

When was the last time you analysed machine recovery rates to determine correct cost recovery?  A typical example is where you replace an older machine with a newer more expensive one; do you make the corresponding adjustments to your cost recovery planner?  Or when determining if a new press should be purchased does your MIS provide empirical evidence to show if you are using the existing one to its full capacity or efficiency or do you make these type of decisions on ‘gut feel’.  Do you have evidence that your ‘gut feel’ is correct, because a wrong decision can often lead to a ‘gut feel’ alright, ulcers.

You may think that getting bogged down in that level of detail is tedious, perhaps even too hard.  That is where proper planning is essential to identify if there is a problem and which areas need scrutiny to fix them.  We call it the 5P’s approach;

Proper Planning Prevents Poor Performance. 

An annual Profit and Loss, Balance Sheet and Cash Flow budget is the first step in driving business profitability.  A good opportunity exists now at the beginning of a new financial year to plan for the future performance.  Consult industry best practice (Print 21 benchmarks are a perfect place to start), refer to historical performance, and set desired profit margins and sales targets. 

Monthly analysis of Profit and Loss reports compared with projections will highlight if targets are being met, or which cost centres are not achieving targets.  Drilling down into Cost Centre reports and Job reports will show where cost overruns are occurring.  Fix the problem quickly rather than allow the poor performance to turn your business into an ‘average performer’. 

Users of Quote and Print MIS have all the tools at their fingertips. A discussion with your dealer will alert you where to start with this process. Those who don’t have the ability within their MIS to adequately provide this information should call their local Q&P dealer and arrange for a demonstration of how easy it can be to drive your business profitability. 

If you require additional Management Accounting Support from professionals who understand your industry and MIS please feel free to contact us to arrange an appointment.

Ben Hamnett CPA,
Printec Solution

Phone (03) 59672488

Mobile 0418 368 237