Planning/Recording - No time I have crews waiting, and time is money!
Reports/Evaluation - So many numbers, what to look for?
Adjusting - I won’t know till the end of the year. Here’s to hoping!
Terms: Revenues: Total money earned Direct Costs: Expenses billed job specific Gross Profits: Revenues minus direct costs Overhead: Indirect costs not billed job specific Net Profits: Balance remaining after Gross Profits minus overhead.
Labor Burden varies by companies but generally includes: FICA, FUTA, SUTA, Workman’s Comp, (Labor portion) Gen. Liability and other labor fees.
These rates vary from company and industry. They often are in the 15% - 35% range.
All companies have some form of these fees.
This burden is often overlooked or misunderstood by owners. We use a PEO to help us manage ours.
Overhead Overheads worksheets need to have all of the categories that your accounting show for overhead. Equipment can also be an overhead. (We will discuss this later.) Overhead is any cost that you can not direct cost to a job. The owner’s/manager’s pay is also an overhead. Dividends are separate.
Labor Cost Worksheet
Labor Cost These labor cost are a direct cost and should be figured into the direct cost of the job. This spreadsheet shows the effect of overtime and burden on the labor costs. Maintenance labor usually ranges in the 35%-42% of revenue. Installs labor usually range in the 25%-35% of revenue.
Equipment Cost Worksheet
Equipment is one of the biggest investments and figuring the ROI is critical.
The cost of running equipment is not only based on the purchase price but also: usage, insurance, inflation, interest, maintenance costs, fuel prices etc.
We have our mechanic job cost repairs to help us determine our real maintenance costs.
By combining a group of equipment and their costs we can determine a crew equipment cost.
You can change up the equipment mix to see the differing rates.
Don’t forget to add a line for hand tools that are part of the crew.
Add your general conditions and overhead recovery percentage.
Add the desired net profit margin. The national average is 5%-15%
Company Direct Cost Summary
By using history, you can enter a % across the top to determine a projected monthly revenue.
Entering history % along the right column will give you an approximate dollar amount per direct cost item.
The light blue areas are for entering actuals to help with cost budgeting.
Indirect Cost Summery
Net profit is the balance after all the direct and indirect costs have been paid.
Net profit is not your bank balance!!!!
Net profit doesn’t truly exist until all of your direct profits and indirect costs have been paid for the year. Most landscape companies don’t realize any net profit until fall.
Net profits are after owners pay but before any dividends.