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4. Measuring Your Margins

Gains can always be made at the margins. These small incremental gains over a month or a year can have a significant impact on your bottom line. This could be additional profit you make from a single project, a single product or service, a particular geographic area, or a certain type of customer. 

Drilling down into your sales and margins gives you great insight into which parts of your business are performing well and which ones need improvement.

Some ideas to help you measure your margins:

1. Use real time and up to date data.
 Ideally, use a cloud-based accounting system with daily data feeds from your bank.

2. Determine which ways you want to ‘dissect’ your sales.
 E.g. by product or service line, by groups of products, by salespeople, or by region. A region could be defined as online sales versus shop sales.

3. Capture sales by these categories at the time of sale or invoicing.
 Adjust your account codes accordingly or use reference fields.

4. Capture the direct costs of these sales by using an inventory or time recording system.
 If you’re selling a mixture of labour and materials, make sure you correctly capture both the labour and the material costs.

5. Compare the actual results you are getting with your month by month budget.
 Do this at least on a monthly basis.

6. Compare your results with industry expectations.
 Consider accessing benchmark statistics from your industry or, better still, get together regularly with similar types of businesses to compare your results. These could be identical non-competing businesses in different locations (meet online) or industry-related businesses in your own region.

7. Seek feedback from us as to how you can improve your reporting of your margins.
 We come into contact with many businesses like yours and are familiar with best practice, as well as what doesn’t work!

The first step in improving your results is understanding exactly where you are right now – warts and all. Talk to us about how to drill down into your margins.

"You can't manage what you can't measure." - Peter Drucker

Moving to Panthera is easy

It’s a big decision to move accountants. We get it. That’s why we have a clearly defined process in place to make it as straightforward as possible.

Step 1: We have a short initial discovery meeting to understand your needs so we can create the perfect service package for your business

Step 2: You receive your tailored proposal with one simple monthly fee and you e-sign the letter of engagement

Step 3: You provide your current accountant with notice – and you leave the rest to us!

We liaise directly with your previous accountant regarding the transfer of information. We request authority from HMRC to act on your behalf. We handle as much of the admin as possible, so you can get on with running your business – safe in the knowledge that everything is going on in the background. And if there’s any action for you, we let you know.

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