Last week we talked about how to start setting up a managerial accounting system to help you use PPA's Benchmark Survey results...and simply make your numbers make more sense. Here's the second step:
Step 2: Track your cost of sales
Cost of sales (COS) is made up of any expenses related to producing the goods you sell to clients, including labor! It's the materials and production costs that go into manufacturing what clients purchase (frames, albums, labs, printing, product freight, music licensing fees, out-of-town job travel, editing, retouching, and so on).
By listing these expenses and tracking them, you can better determine whether your pricing is profitable and your workflow is efficient.
Don't forget to stay tuned for Step 3 next Tuesday.
If you haven't already, now is the time to sign up for this year's Benchmark Survey. You can be a part of the only industry survey and analysis that helps photographers run better businesses.
Remember: PPA's Studio Management Services (SMS) can also help you understand cost of sales and how to set up your accounts according to managerial standards.