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Is Your Business Leaking Profits? - Dashboard NY

21 June 2020

{3 minutes to read}  Every day, individuals, families, and businesses are supported by people whose roles are critical to our everyday lives, but most of us don’t spare much thought to them. When you turn on the faucet and there is no water, who do you call?

Oddly enough, there are times when a business needs these support services like a plumber.

Many businesses turn to Dashboard Enterprises for these types of “behind the scenes” service and we are happy to help them find solutions to their problems.

Some entrepreneurs call Dashboard their Plumber. Why? Because when you join us in the discovery process, you learn how many profit leaks there are in your business. Many CEOs spend a lot of their time pushing sales. While we cannot argue about that let’s go over the math. Let’s say your net income is 10% — every $100 brings in $10 of net profit. When Dashboard begins to reengineer your processes, find those “leaky pipes” and weld them shut, the total savings goes directly to the bottom line.

Examples:

The company: An importer and distributor of lady’s accessories. Dashboard started a discovery process and found the following leaks:

1. When reviewing their UPS bills, we noticed that they were charged $4 when the shipping address was not correct and that in one week, they shipped a particular customer five times incurring an extra expense of $20. WHY? Because no one went back into the system to fix that customer’s shipping address. Initially, employees were thinking, “What’s the big deal about $20?” But when we began to look at the rate of occurrence, this penalty cost the company $50,000 annually. Once the customer addresses were updated, this $50,000 went straight to their bottom line, giving them an increase in net income equivalent to $500,000 of sales!

2. The company was factored, (businesses create cash flow by selling their invoices to a third party, a factor or factoring company, at a discount). Before the company is allowed to sell their invoices, the factor must approve their credit. Often the factor will extend some credit to higher risk retailers, but they will charge a premium. 

When Dashboard reviewed their factoring statements and surcharges, and they realized that some of these retailers were no longer an assigned risk but were still being charged the premium. We had a meeting with the factor and they acknowledged the error, resulting in the client saving $100,000 per year or the equivalent of $1,000,000 in sales.

Need help plugging leaks, and better managing finances? Give Dashboard NY a call at 516.385.2333 or contact us via our website.

Carol Soman CPA
CHIEF EXECUTIVE OFFICER

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