Four Key Benefits of Sales Reporting by Category for Service Companies
You’re already aware that knowing where your money is coming from is crucial to the growth and success of your service-based business. But as you expand, so does the complexity of managing your finances. Before you know it, confusion sets in, overwhelm takes hold and maybe even a little bit of frustration.
The great news is, there’s a simple-yet-powerful approach to taking control of your money: break down sales reporting by category. Want to know why it works so well and how you can start doing it in your company? Let’s get into it.
Why categorize sales reporting?
There are plenty of reasons why you’d want to categorize your sales reports (and we could talk about this stuff all day). But because we respect that you’ve got places to be (and a business to run), we’ll stick with the top four. Here they are!
Gain clarity + insight
When revenue is broken down by category on a sales report, it becomes clear where money is being made. For example, let’s say you own a pest control & lawn care company — knowing what percentage comes from residential termite treatments vs. commercial accounts vs. fertilization & weed control programs would be extremely valuable information. Then you throw bundles (pest + mosquito + termite + lawn) into the mix, a variety of frequencies (monthly, bi-monthly, quarterly), and levels of service plans (bronze, silver, gold, platinum, palladium, etc), and you have a real reason to keep your financial statements in order. FRAXN can help by segmenting your financials by division or branch, allowing you to analyze the gross profit of your pest control operations separately from your wildlife services, ensuring you have a detailed understanding of each division’s performance.
Make better decisions
Detailed sales reports like these give you the ability to make more informed choices with your company’s resources. Think about our previous example… if residential services spike for some reason, you should allocate more resources (ie technicians, vehicles). On the flipside, if residential lawn care services are declining — investigating why and taking corrective action sooner than later. Lean on your CRM to recognize daily trends. FRAXN client Jordan Killpack shared that “FRAXN has made it easier and faster for me to make financial decisions, which has given me more time to spend out in the field.”
Improve financial planning efforts
Categorized sales figures also assist with budgeting + forecasting; because when realistic goals can be set for each category & tracked throughout the year, it’s much easier to plan for growth and manage cash flow — which ultimately allows you (the owner) sleep easy at night knowing exactly what needs to happen in order keep this ship afloat. All FRAXN clients have access to a powerful forecasting tool on their personalized dashboard.
Business valuation
FRAXN covers the cost for an annual valuation with Potomac, the global leader in mergers and acquisitions (M&A) for residential and commercial service businesses. This valuation also provides an outsider’s perspective with crucial insights about your business. Potomac does over a billion in sell-side transactions per year so you can’t buy this personalized information anywhere else.
Conclusion
FRAXN focuses on service-based businesses and offers tailored financial processes designed for specific industries and objectives. Their approach includes providing actionable financial insights that extend beyond standard financial statements, which can significantly enhance your business operations. If you’re interested in learning more about how FRAXN can assist your company specifically, you are encouraged to schedule a one-on-one walkthrough to discuss your needs in detail.
