|★ APPLICATIONS ★ BUREAUTIQUE ★ JOB ESTIMATING PRODUCT COSTING|8000PLUS) ★|
|Job Estimating Product Costing||Applications Bureautique|
Keeping track of costs and profit margins in a small business can be a major headache. Material prices can fluctuate wildly from day to day, and this means taking difficult decisions all too often about how to price products and services.
Cornix software have now produced two programs to help in just this situation. Product Costing aims to allow manufacturers to see an up-to-date breakdown of a product's costs, and Job Estimating does much the same for service industries.
The principles of operation
Both programs work by building up a database of the costs of "components” of a product or job. The components are either materials, like the cost of bricks, or they can be services such as labour costs.
For each component, you specify its basic unit such as reams (of paper) or hours (for labour), and also the current price per unit.
Having constructed the component database, you go on to specify how the components are combined to produce a product or job. The program then automatically calculates the costs and profits, and offers a suggested final price which you then have the option to override if your experience of the market tells you differently.
The virtue of this "database" style of operation becomes apparent when you have several different products or jobs being costed from the same basic components. Suppose you are a manufacturer of banana flavoured products, and suddenly the price of banana flavouring soars. By changing one entry in the program you can propagate this price change through your whole product range.
The documentation for both packages is excellent, written for businessmen and not for computer weirdos.
In operation, the programs are fairly self-explanatory, running from simple screen menus.
In Product Costing, you build up the component database as described previously, specifying for each one the cost to you (either purchase price or wages paid).
The product description is entered, one component at a time, giving the quantity of each used. At the end, the program calculates the total cost, asks you for the markup to be applied (maximum 100%) and once you have fixed the final price it can print out a profitability statement for each product.
There is no allowance for VAT in prices, on the assumption that since you can reclaim it all it has no real effect.
Job estimates are built up in much the same way as product costs, by specifying the labour and material costs of the components. However, in this case the profits are worked out differently.
When defining a component, you are asked to give both the cost price and the selling price, effectively specifying the trade discount you get on each item. So rather than asking you to fix a mark-up. the profits are worked out from the individual component profits.
Job Estimating is designed to provide customers with an on-the-spot estimate or quote. To do this, you can print out a breakdown of the estimate, hiding all the profit figures and adding in VAT, with the customer's reference and details, headed by up to 10 lines of your own company details.
If you run a small business, only you will know how much you need such programs to help you. Even if you can do costing in your head, these packages will be very useful in presenting your figures to clients or financiers - everyone believes computer printouts!
There are some annoying restrictions in both packages. First, you can't define the cost of one component to depend on another, for example to say that you always pay a skilled worker twice an unskilled worker; you have to enter each individually.
Second, once you have defined a product's components, you can't add new ones, like if a customer extends the job spec on a quote. Since you can edit components, the recommended process is to define some dummy ones for each costing, which can be edited into real ones later, but this is awkward.
Overall, these two packages will be a great help in small businesses (which is where the PCW has its main business market), but some inflexibility means they won't help GEC prepare international bids.