By Mark Porter
Samples are a necesary evil in the businesses of Print Finishing, Trade Binding and Die Making. Due to the three dimensional nature of the products these industries produce and peoples general inability to visualize the need for samples is large.
But do you collect revenue for these samples or do you know how much the production of Samples can cost you in any given year. It is vital that a business either collects revenues for all the goods and services it produces or at least is aware of costs that it should build into the overheads to ensure they are captured indirectly.
Our experience with members of these industries is that are neither collecting revenues for this service either directly by rebilling or indirectly by building these costs into overhead. Therefore samples is a direct drain on your profits.
You should open a job for each sample this will allow you to do several things.
1. You can have a unique numbering system for Sample Jobs as opposed to regular jobs so employees no they are working on a non rebillable job and will be more aware.
2. You can have information on the Job Ticket that is specific to a Sample. The information is not mixed in with other "regular" job information. Employees do not have to risk confussion or waste time hunting for sample information.
3. The information on the Job Ticket is specific to Samples and therefore jobs can be found and managed based on on that information. You can for example is how many times the file was resubmitted etc.
4. Track costs associated with the sample. Even if you are not going to rebill the customer it is important that you know how much each sample cost you to produce and more importantly how much sample making as a whole costs you each month and each year.
5. If you do rebill sample costs you can then track this through profitability because you have your costs from Job Costing and your Sales from Invoicing. Profit = Sales - Cost.
6. Track costs by customers. Track progress of Sample through Production.
7. Based on costs either work with customers that are incurring large portions of the expense or build your sample costs into your overheads to ensure you are recovering Sample making costs and not just watching your money go down the drain.
As we look for more and more ways to watch expenses and capture more sources of revenues - Samples can be an excellent place to start.
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