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The example below shows a $69K or 38% profit improvement achieved with a 5% increase in labour utilisation i.e. from 75% to 80%.  If you’re paying people 40 hours per week and charging 30 hours on jobs… if you can get an extra 2 hours per person per week this results in extra profit.

Conversely… The example below shows a 5% drop in both labour utilisation and recovery % of labour, results in a $134K profit reduction.  ‘Recovery % of labour’ being the number of hours billed of all hours worked on jobs/projects.

To learn more about this simple way to positively impact profit watch this video.

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By Sue Hirst Co-Founder CFO On-Call

Sue was managing an accounting practice when she co-founded the business in 1991. She has expertise in financial management, product and service development and human resource management.

Sue is passionate about explaining accounting concepts in clear English so business owners can make sense of their own numbers.