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In the new service-based economy, more and more businesses make their money from services. Even industries that were not historically service based—retailers, distributors and manufacturers—are offering services to their customers. For these businesses, services add value to customers and dollars to the bottom line through personalization, maintenance contracts and product training.
Not all ERP systems are created equal in tracking the profitability of services through project accounting. For those businesses new to service delivery, there are some factors to consider when tracking revenues versus costs.
Tracking service profitability
The challenge for service-based businesses is to precisely measure the profitability of the services you deliver. Some projects may be very profitable, others not. The trick is in figuring out which is which so you can build profits.
In order to measure profitability you need to capture and assign actual revenues and costs to specific projects. This may require some functions new to your business, including:
Measuring service profitability is becoming more important for many businesses today. Make sure that you choose an ERP solution that will help you manage projects to build your profits. Let’s talk about measuring project profitability for your company today.
Published on 19th October 2012 by Jeanne DeWitt.