Closing the month is something that we are really serious about here at Sparky Coach. 

In fact we are so serious about it that we employ full time accountants to plow through your info and make sure what we are extracting is correct. 

Today Crowe takes us through a breakdown of a close the month including the key metrics to look out for + key components to watch (ie revenue, COGS, gross profit, other revenue, COO, net profit etc). 

A numbers system is only as good as the data entered into it, and in this case you need to ensure that all your data is going into the correct fields or risk eternal damnation from the close the month gods. 

Enjoy the pod x 

**this session is meant for informative purposes only and is not to be replaced by advice from chartered accountants. 

Key topics:

• The importance of live data: revenue, gross profit, and net profit as core indicators
• How revenue correlates with profit; the significance of percentage margins
• The pathway from revenue to net profit: from cost of goods sold to operating expenses
• How to measure and manage job profitability on a per-job basis
• The impact of overhead costs and how to manage them effectively
• The dangers of focusing solely on revenue or gross profit
• Strategies for fault-finding—starting from the bottom and working upwards
• The role of accurate job quoting and handling to improve margins
• The importance of holistic view and continual review, not just yearly financials
• Practical tips for operational growth, cost control, and decision-making

Timestamps: 

00:00 - Introduction to key month-end metrics 00:26 - Why market wages matter and profit targets 00:56 - Reframing revenue and net profit as hijacked metrics 01:26 - The importance of holistic profit pathways 02:22 - Visualizing revenue growth and profit margins 03:20 - Connecting revenue with profit expectations 03:45 - Impact of trade tools on net profit 04:13 - Revenue, cost of sales, and their influence on gross profit 04:42 - Critical components of revenue and cost structure 05:13 - Selling labor versus materials: understanding margins 05:42 - Keeping operating expenses low for healthy profit 06:12 - Managing billings, operating expenses, and efficiency 06:42 - The significance of proper chart of accounts 07:12 - Market wages and their impact on gross profit 07:41 - Efficiency in managing overheads and administrative costs 08:09 - Overheads tailored to business size 08:39 - How to lower overheads through better business modeling 09:08 - Moving from gross profit to net profit as the ultimate indicator 09:37 - Material costs and their effect on net profit 10:06 - Proper quoting and handling as profit determinants 10:35 - Beyond revenue: the importance of job-by-job analysis 11:27 - Recognizing small errors and continuous improvements 11:57 - Using gross profit as a quoting and pricing benchmark 12:19 - Other revenue streams and their relevance 12:49 - Tracking operating expenses like subscriptions and vehicle costs 13:18 - Understanding advertising costs and their impact 13:47 - Holistic view: combining revenue, cost of goods sold, and operating costs 14:16 - Effectiveness of lean business models 14:44 - Building hourly rates based on overheads and wages 15:14 - How to manipulate overhead costs and increase efficiency 15:41 - Industry benchmarks for overhead per hour 16:10 - The importance of accurate cost and expense tracking 16:31 - How overhead influences pricing and profitability 17:01 - Long-term growth versus short-term pain 17:27 - The impact of business size on overhead costs 17:54 - Limitations of calculators and need for manual oversight 18:21 - Scaling revenue while maintaining or improving net profit 18:50 - Moving high materials volume to increase profit per hour 19:17 - Power of purchasing leverage and material margins 19:46 - Holistic business health: top-line revenue versus net profit 20:12 - The importance of accurate job costing and progress claims