Bill Kinnard’s Post

Do your employees believe in your pricing? The answer to this question can significantly impact your company's bottom line. Some companies understand that their pricing is not influenced by what others charge, but rather by gathering their actual costs of doing business and determining the appropriate hourly rate to generate profit. This approach ensures profitability and provides a foundation for justifying the rates charged. By having a detailed process for setting rates based on actual costs, you can ensure employees trust your pricing and maintain profitability... https://lnkd.in/eR-R9i5v

Do your employees believe in your pricing? The answer to this question can significantly impact your company's bottom line. Some companies understand that their pricing is not influenced by what others charge, but rather by gathering their actual costs of doing business and determining the appropriate hourly rate to generate profit. This approach ensures profitability and provides a foundation for justifying the rates charged. By having a detailed process for setting rates based on actual costs, you can ensure employees trust your pricing and maintain profitability... https://lnkd.in/gMekBYQH

Do your employees believe in your pricing? The answer to this question can significantly impact your company's bottom line. Some companies understand that their pricing is not influenced by what others charge, but rather by gathering their actual costs of doing business and determining the appropriate hourly rate to generate profit. This approach ensures profitability and provides a foundation for justifying the rates charged. By having a detailed process for setting rates based on actual costs, you can ensure employees trust your pricing and maintain profitability... https://lnkd.in/ggUACuFp

Cost-plus pricing is one of the simplest and most commonly used pricing strategies. While it offers the advantage of being straightforward, it also has its limitations. For instance, manufacturing businesses may struggle to align production with demand, making it difficult to maintain profitability. The main drawback of cost-plus pricing is that it ignores competitor profit margins and focuses solely on the business’s own markup. To mitigate this, costing departments should consider the competition, market trends, and sustainability factors when setting markup percentages. Despite these challenges, cost-plus pricing remains valuable for gaining insights into business costs and achieving consistent profitability. #Costpluspricing #Managerialaccounting #Financialanalysis #Accountingformanagers

Pricing objectives, also known as price points or pricing strategies, are a set of goals that have been established by a business owner to help them make decisions about pricing. Here's a helpful article on Pricing Objectives https://1l.ink/JJ5J6MJ

Pricing objectives, also known as price points or pricing strategies, are a set of goals that have been established by a business owner to help them make decisions about pricing. Here's a helpful article on Pricing Objectives https://1l.ink/JJ5J6MJ

Pricing objectives, also known as price points or pricing strategies, are a set of goals that have been established by a business owner to help them make decisions about pricing. Here's a helpful article on Pricing Objectives https://1l.ink/JJ5J6MJ

What is Operating profit margin This ratio shows the profitability of each unit of the company's operational activities. Operating profit margin is a stronger measure to evaluate the company's profitability and sales because non-operating items and financial expenses and taxes are not included in the calculation of operating profit. What is Gross profit margin It is obtained from the division of gross profit into sales. A gross profit margin of 20% means that the company earns 20% of its sales after deducting production costs.

Understanding this definition of #actualcost is essential for businesses to make sound business decisions. The actual cost is the real cost of a product or service after the deductions and adjustments have been made. Read the post to know more about the actual cost, its definition, details, formula, and calculation.  #actualcostcalculation https://lnkd.in/gBnWFPcE

Do you know how to price and review your pricing for your services and products? For some of you, if you are a small business and buy goods and immediately sell them on managing your pricing strategy might be easy, but how often do you look at the market to review what others a) are charging and b) value they might be adding? Working with businesses on a daily basis allows us to see an array of pricing strategies from finger in the air to well thought out reasoning. Often the hidden costs of your business are not taken into account when pricing. If you want to offer a product or service for sale you might look at the cost and double it (add 100% to the cost price) and think you are doing well. But when you do the maths, this is only a 50% profit margin and that 50% gross profit then has to contribute the business overheads. By the time this has been accounted for your net profit may be in the region of 10 - 15% or less and then you have tax to consider. This of course is all dependent on your overhead costs which are different for every business! Taking the time to truly understand your financials is important, to allow you to adjust to market trends, price increases or simply ensuring you stay on track with your current profit margins. We recommend clients look at their pricing at least every 6 months and in the changing landscape every 3 months or more regularly if you are a trades person or import goods. Is it time for you to do a price check? #smallbusiness #increasingprofit