Are You Calculating Your Overheads?

Are you clear on the overheads you need to recover in your pricing? We find a lot of our clients don’t account for these properly.

If you’re turn over is still in the low millions or lower, proportionally your overheads might be quite high.

If you’re not calculating your overheads and just using an arbitrary figure, then you’re risking overheads eating up your profit.

In fact, if at the end of your accounting periods, you keep finding you’re not left with much retained profit, this is a clear indication that something is wrong with your pricing, and there’s a good chance you’re not accounting for your overheads properly in your pricing.

Overheads are dynamic and every company’s overheads are different.

As you grow and things change (like putting that extra office staff member on), your overheads change with you.

It’s important that you review and update your overheads on a regular basis (quarterly minimum), so you can ensure you come out with your target profit.