Business Best Practice – Product & Services Costs
Manage your product and service costs to ensure your business is profitable. Review your business practices against best practice business benchmarks to identify gaps that may be holding you back or putting your business at risk.
One of the critical principles behind accounting statements is that revenues are matched with the related costs of providing the products or services from which the income is derived.
This enables the profit of the business activities to be properly measured, whether that is over a time period, by a product group, by market sector, or by customer.
If you don’t know exactly how much it costs you to deliver your products or services you are putting your business at significant risk. Businesses have failed just as they were starting to grow because they got these numbers wrong.
So how does your business measure up?
Review the business best practice checklist and find out.
Business Best Practice Product and Services Cost: The Checklist
- Do you know what it costs you to make and deliver your products and services?
- Have you included the labour resources and costs required to achieve your production targets?
- Do you calculate the level of stock or work in progress at the end of each month?
- Are all your direct costs related to revenue recorded in the same time period that the sales are made?
- Do you review your prices when market conditions change?
- Do you review your prices at least annually?
- Are you maintaining acceptable profit margins across all your products and services for the sustainable viability of your business?
What are Best Practice Benchmarks?
Also known as generic or process benchmarks.
As the names suggests Best Practice Benchmarking involves identification of best practices across generic functions, processes or operations, identifying the most effective operating practices from other businesses that perform similar functions.
Best Practice Benchmarking is effective across the full range of generic business operations: branding, marketing, sales, operations, financial management, technology, human resources, risk mitigation and strategic planning.
The Better Business for Good Company BIPlan System® is an example of Best Practice Benchmarking. Developed by a team of small business specialists the BIPlan System enables every small business to benchmark their business against over 200 individual benchmarks covering areas as diverse as brand identity, financial management, management of people and risk, customer relationships and environmental impact. Each item is important in their own right, some take longer to implement than others, but taken as a whole they help a business to become more profitable as well as a good corporate citizen.
Other types of business benchmarking include performance, functional, operational, industry and competitive. Learn more about how the different forms of benchmarking can help your business.
Want to make your business more profitable, scalable and saleable?
Measure, manage and improve your business against more best practice checklists like this.
Developed by small business specialists, the BIPlan System is the most credible tool a small business can use to measure, manage and improve their business practices against best practice standards.
- Assess how your business performs against dozens of best practice checklists. Taking the Assessment alone will be a valuable, eye-opening experience.
- Compare your answers to best practice standards developed, tested and proven by Australian small business specialists
- Create a customized improvement plan for your business with our free best practice guides and the support of our business advisors and specialists to help you implement