Why You MUST Know Your Costs.
Cost Accounting. Those words have sparked fear in the hearts of many college-level business students over the years. Yet, if you are a business owner, you must face it, stare it down, and conquer it.
"Isn't it enough for my accountant to know about my costs?" The short and bitter-pill answer is: NO!
If you wait for your accountant to analyze your costs, it may be too late.The main problem with accounting, universally, is that it generally looks backwards. So, if you have already made key decisions about your business, such as pricing for products and services, you may be losing money with each sale. The more you know about the three basic cost elements:
the more informed your decisions will be. An inaccurate guess is much too risky.
Depending upon what type of business you run, Material costs may not be a significant factor. Labor and Overhead are always important. Even though you may be the only "employee" in your company, factors 1 and 3 are critical to profitability.
Don't know where to begin? DMMI Associates can assist you with measuring your profitability factors.
E-mail us for help getting started.
DMMI can help you to chart your way through the business growth maze.
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