The smart money series: 3 ideas to stop wasting money

Sylvia Borken, at the family store, Knox Market, at Knox and Plymouth Avenues in North MinneapolisLast week, we talked about how businesses could easily lose money. This week, we’ll think about ways we can save money or increase revenues without doing more work.

  1. Save money: Go paperless. As we saw last week, sending a bill by regular mail costs about a dollar. When you invoice your clients via email, there is no paper to print, no stamp to buy and no waiting for the letter to reach the client. Plus, most businesses already have email accounts, so there is no additional cost to email the invoices.
  2. Increase billables: Tie complete timesheets to payroll. Often the challenge is not to know what to bill and what not to bill the client, but getting the information from the employees who do the work. One of our clients fixed the problem bluntly: he tied the employee time sheets to payroll. Even the salaried employees. This helped getting everyone’s time worked before payroll cut-off, and has helped getting all the billable information in the time and billing system.
  3. Save time: Automate invoicing. Instead of building each invoice individually, smart businesses automate the process. It can be done with a basic mail merge in Word, or it can be done with a professional time and billing system like Abak. With Abak, the time required to produce the invoices can be cut down by half or even more. This means clients get their invoices faster, and businesses get paid faster too!

What about you? How do you save money in your business?

Revenue By Resource: Who’s Bringing In The Money?

Negro bus-boy dishwashers, Investment Pharmacy, Washington, ...In a business where time is the product and its value is based on the people in the team, it’s important to know how much revenue is created by each team member. It can be used as a performance objective given to the resources or department leaders. It can also be used as a critical business metric.

Revenue by resource is the sales figures for each team member. From this information, after subtracting the cost rate, one can get gross profit margins for each team member.

Knowing how much revenue is created by each team member is essential. Without this information, it becomes impossible to prioritize resource assignment and evaluate team performance.

Resource Work Billable Non-Billable Revenue
Resource A 40 40 0 4000.00
Resource B 65 40 25 4000.00
Resource C 56 20 36 2000.00
Resource D 60 0 60 0.00
Resource E 50 35 15 3500.00
Total 271 135 136 13 500.00

As we can see in the table above, the resource bringing in the most revenue is not the one working the most hours, but the one with the highest proportion of billable hours.