With a subpar accounting program, it can be hard to tell how much money your shop is making. Sometimes, it’s hard to tell if your shop is making money at all! Using the right accounting program will make it easier to protect your shop from economic trouble and raise your bottom line.
Surviving the Recession
During the 2008 recession, Custom Production Grinding knew they had to change from business as usual. In order to survive the recession, they needed customers to keep buying their parts, and they needed suppliers to keep providing materials. It was in their best interest to help their customers and suppliers where they could. Using E2’s reports, they were able to mind their cash flow so that they could pay their suppliers without going into the red and give their customers a bit more time to pay when it was possible. Custom Production Grinding was able to make it through the recession while doing their best to keep their network intact and their shop afloat.
Quoting for Feast or Famine
Sometimes job shops have too much work and other times they want more work. With great accounting software, it’s easy to see if your shop is in a financial feast or famine. Your shop could be running machines at full capacity and not making much money, so being able to look at your profits is key to knowing how your shop is doing. If your shop is making money, then you can afford to charge a little more for jobs to make it worth your while to fit them in. If your shop isn’t making as much money, then you might want to charge a little less so you win the bid for that job. However, it’s also important to understand how much you charge for your jobs in general.
Making Money on Jobs
With accurate and up-to-date accounting, it’s easy to tell which jobs are making money and which are not. Great accounting software and reports can help you find which jobs aren’t making money for your shop. Once you find those jobs, if your estimating software is connected, it’s a snap to adjust your estimates so you charge the correct rate in the future. On the other hand, if you charge far too much for a job, you’re not likely to win a bid on it. In the accounting reports, you can see which jobs are making money and make sure you’re estimating them well.
Without good cash flow, a shop will close its doors. So accounting software that keeps you updated and has helpful reports is critical to keeping your shop open and thriving, even during a recession. If your shop hasn’t updated your software in a few years, take a look at your options. The accounting department will thank you.
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