Do you know your Break Even Point?
No matter how great your business model is, you can’t survive if you can’t manage your company’s cash flow. Calculating your break-even point will ensure that your business is profitable based on your costs and your sales.
Many businesses fail due to poor cash-flow management.
One of the most shocking facts revealed during the survey was that most of the businessmen fail to analyse the cost sheets correctly and put wrong Gross Mark-Ups at the time of pricing their products.
Most of the businesses are carried away by gross margin and forget to analyse fixed overheads and put them on the back burner.
The best way to analyse if you are making a profit is to keep track of break-even sales.
The higher the gross margins, lesser the break-even point or lesser the fixed overheads lesser the break-even point.
Keep a tab on your break-even point, keep making sales exceeding your break-even point and the higher you go away from break-even point, the more cash you generate from your business.
Happy Accounting!
Corient helps Business to manage their accounting function by providing Book Keeping, Payroll and Other Services on a real time basis on various software including Xero, Sage One, Quickbooks, Freeagent, Kashflow, Xero Workpapers,. Our accounting services help businesses to take right decision and grow by business based on accurate and timely financial data
If you need any free consultation on how you can increase revenue by adding service lines, please feel free to get in touch with us at info@corientbs.com
Visit us at : http://www.corientbs.co.uk
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