Job Management - Software Associates

Job Management
Profit margins are eroded by problems with Pricing, Performance, and Paperwork

If you are in the service industry, it is likely that you face challenges in some (if not all) of the following areas:

Pricing • Performance • Paperwork

Pricing: The Problem
Small businesses – less than 20 employees - all have a very similar profile. One characteristic is that they all have between one and three major customers that will account for over 50% of their revenue. These major customers will also dictate how they are to be billed and what charges they will accept for the various services being provided for them. And if our small business owner wants to keep their trade, he complies to the best of his ability – which means trying to cope with what can be quite complex billing rules.

The average small business computer system cannot cope with complex pricing rules; which means that work done for these major customers generally has to be rated manually. And now comes the interesting but predictable human touch. The person doing the rating knows that if they charge too much, they will be faced with the time and effort of raising a credit, so, unless they are absolutely sure of themselves, they will tend to give the customer the benefit of the doubt and undercharge the customer. Not by much, and not every job; probably somewhere between 1% and 5% . so let us say 1% on average. The customer of course plays their part by accepting the undercharge and not making a fuss about it.

This is 1% of turnover. You have done the work, incurred all the costs, so this 1% of turnover is actually pure profit. If you are making a net 10% profit per year, this 1% of turnover means that your profit would be 11% if you were able to rate all work accurately. In this case the 1% of turnover equates to 10% increase in profit.

Performance: The Problem
Performance problems can be traced to the common faults of:

Taking a job and then not doing it
Only doing half the job the customer requested because the details are missing
Messing up when doing repeat work ie not doing it properly

Paperwork: The Problem
Everybody knows what the problem is with paperwork – there is just too much of it!. We are drowning in it. Some of it is compulsory , ie required by government as part of compliance rules eg GST returns, PAYE returns etc. The rest of it is all of our own making. However - one inescapable fact exists.“All businesses lose paperwork”

The real worry is that some of the paperwork we have lost or at best „misplaced‟, is needed for our own invoicing. This lost paperwork takes the form of job sheets, waybills, consignment cotes or any one of a dozen other forms. The work has been done;
the customer is very happy with the job. The staff have been paid – they too are happy. All ancilliary costs eg fuel, Road User Charges have been incurred and paid for. The only thing we haven’t done is bill the customer.

We haven’t billed the customer because we haven’t processed the paperwork. And we haven’t processed the paperwork because it never made it back to the office. It could be floating around the floor of Tom’s van; it might be tucked neatly into Dick’s back pocket; Harry might have it sitting on his table at home – he really does intend to bring it into work – sometime. Because we don’t know that the paperwork is missing, we don’t know to chase it up.

We ask open questions of the staff “Has everyone got their paperwork up to date?‟ and of course every one answers “Yes‟.

Because we don’t have the necessary information we don’t know to ask the highly specific questions such as “Harry! what have you done with the paperwork for the Smith job you did on Tuesday morning ??”.

So how prevalent is the problem?.Industry surveys would suggest that between 1%-5% of all paperwork is lost - permanently. Taking the lower amount this equates to 1% of turnover, which, because all costs have been incurred, is actually pure profit.

JobPro : The Solution

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