Preparing to Set Up Profitability
Several things can be done ahead of time to make the set up portion of the Profitability module go a lot smoother. This documents details those items. Note that Profitability is a sub-module located in the Sales module.
Step 1: Review the Sales History over the past few years to determine how sales are distributed. Know what percentage of sales to expect in each month of the year.
Step 2: Decide if there are any Sale Codes that will be looked at separately when examining the parts/labor mix and margins.
Step 3: Have a recent copy of a Profit & Loss statement handy to use when entering all expenses. Also use this to determine the parts and labor sales mix as a percentage and the actual gross margin within that percentage. This will be entered in the Annual Setup screen.
Step 4: Check each employee to insure that they are all set up properly. This information is vital to creating an accurate costs analysis for labor.
- Expense Category should be set to Cost of Direct Labor for technicians and Cost of Sales for counter people.
- Expense Category should be set to Other/Fixed Operating Expense for the owner and then accounted for in the expense categories list.
- Confirm that the pay method and all associated rates and profiles are set up properly for each employee.
- Each employee needs to be set up to use the Time Clock if their proficiency will be analyzed. The scheduler can be used to populate the time clock automatically if employees will not be clocking in and out of the system. Call our support line for assistance in setting that up.
Step 5: If Maintenance Sales will be monitored, have a list of which Sale Codes/Product codes groups contain maintenance parts.
Step 6: Know which Estimate Statuses classify as a phone quote. Those are counted separately when calculating estimate conversion rates.
Step 7: Decide on a goal for the shop’s Net Operating Profit. Other goals will be calculated based on ending up with that amount as NOP.
Once the above steps are completed, data can be entered, and the shop profitability can be analyzed.
Contact Janco Support at 800.782-5872 (US) or 800.323.5872 (Canada) with questions about this or any other procedure.
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