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Outsource - Complete Controller

Leading large-scale manufacturing and service-oriented corporations have been stressing scaling down costs and outsourcing low revenue business-generating units to offshore countries. This is the latest strategy adopted as part of the global competition, curbing cost and outsourcing little revenue business units, such as customer service centers, software, and design development, and assembling of electronics and consumer appliances. World-renowned corporations have adopted outsourcing approaches, such as stitching, labeling, packing, and finishing. Such businesses include Zaraman, Inditex, Ralph Lauren, and other leading stitched apparel. Check out America's Best Bookkeepers

Now the question, which comes to mind is how outsourcing jobs or outsourcing business processing operational units can generate revenue in offshore countries as opposed to being an internal division of the organization. The answer is simple, ever since the Activity Based Costing (ABC) has been introduced; many large-scale and world-renowned corporations started to demarcate Cost Business Units and Revenue Business Unit. These units are like financial division, production division, customer relationship department, human resource department, customer service department, printing department, in-house software development, and advertising department. For example, Apple has outsourced the assembly, packing, and printing of its consumer items like iPhone, Ipad, and iMac to China. If someone from the Middle East, Far East Asia, South East Asia, and Oceania wants to purchase any of the Apple Products online, when the package arrives, the backside of the product will clearly state, “Made and Assembled in China.” This is because the cost of production and labor is substantially lower in China. In the end, when cost and revenue are collated, and the bottom line is derived. This primarily affects the EPS (Earning per Share) and the value of share price on the stock exchange. This is imperative, as these corporations are public-quoted and listed on the stock exchange. If there is any financial misrepresentation or negative trend in the income statement, it is bound to impact the share price, investor’s confidence, and overall share value of the company. Check out America's Best Bookkeepers

Therefore, if the business corporation outsources those units of the operations that are not generating substantial revenue, it can be a very profitable proposition. The monetary advantages can be brought to fruition in the least amount of time and provide you the leverage to concentrate more on producing sales and effective customer service, thus being evaluated efficiently.

The scope of outsourcing is broad. Entities are providing both inbound and outbound customer services through IP telephones, accounting and bookkeeping services, CAD drafting services, photography, advertisements, marketing services, and other areas to bear in mind when considering how one can amplify revenue stream. Check out America's Best Bookkeepers

At this juncture, it would not be an incorrect statement to say that, nowadays, those units are usually being outsourced, which are generally labeled as after-sales service. In real-life scenarios, we come across situations where a lot of managers and executives spend a substantial amount of precious time dealing with after-sales service. This is frustrating for any management executive. When the person is finally able to make a sale or close a deal with the anticipation that the performance appraisal will bear fruits, the same person finds a glut of messages and issues related to after-sales. Therefore, the business unit of customer service is of paramount importance. Since they consume a lot of time, consequently, such groups are outsourced to professional call centers and customer service organizations to retain the customers. On the other hand, the in-house or internal management executives can focus on bringing in more revenue by acquiring new customers.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers

The food and beverage industry is a tough nut to crack when it comes to generating comprehensive revenue. The competition in the industry is always increasing, which means you must come up with a differentiating strategy to up your percentage of revenue. However, it is still a lucrative industry for new start up’s and also for seasoned restaurant owners who have the expertise to cut labor costs and other overheads, which tend to take up most of the percentage in revenue.

 

The high percentage of labor costs in revenue is due to the high dependence on labor in the industry. From cooking to serving and then after-sale services, all jobs are labor-intensive. Even the back end of your operations highly depends on skilled labor and their efficiency to carry out the designated tasks. Check out America's Best Bookkeepers

 

Labor costs

According to research, labor costs in the food and beverage industry take up around 20 -40% in the percentage of revenue. The percentage varies from restaurant to restaurant as well as other factors such as level of automation, target market, location, and type of offered services. This is a high percentage when we observe that it is a single cost, and we have not added other costs, which would result in a higher number, leaving business owners with little margins.

 

Food and labor costs differ from the kind of food service provider. As a fantastic restaurant, you will incur and higher food and labor cost percentages than if you are running a fast food or casual dine-in restaurant. The product itself, quality, service, pricing operating hours will influence the percentage of revenue. States have minimum wage limits for jobs, so you will incur a minimum cost as soon as you hire a worker. The amount of beverage sales, as a part of the food mix, has a substantial effect on the cost percentage as a whole. Check out America's Best Bookkeepers

 

Calculating labor costs

The biggest and most obvious cost would include the wages paid to your workers for the work they are performing for your business. Some of them are paid on an hourly basis, while others would be permanent staff. Businesses often are careless about factoring in other labor-related costs, which are related to benefits, leaves, vacations, health care, and so on. It is not easy to calculate all these costs accurately, and you would require proper bookkeeping set up to account for them at their closest.

Labor costs as a percentage of revenue substantially rise as you add the obscured costs, which are not so obvious.  Check out America's Best Bookkeepers

 

Other costs

Once you have calculated all the costs, the job is not done because other costs are still to be calculated, which have complications of their own. The cost of acquiring the raw material for food before it is prepared and served or sold is another significant cost that cannot be ignored. Logistics, overheads, and utility bills are some other costs that you should keep in mind while operating in the food and beverage industry.

 

How to reduce labor costs?

The survival of your business depends on your ability to reduce costs and bring them to an optimum level. While reducing all costs is important, costs related to labor are perilous because they take up a significant share of the percentage of revenue. The staff for food and beverage businesses should be hired on a need basis. There will be instances when your restaurant would appear understaffed because it’s full, and at times it would appear to be overstaffed because there is no one to serve. Striking an optimum balance in between is the key to reduce labor costs. One way is to keep a specific number of permanent employees and hire the rest on an hourly basis if the demand arises. There are ways to work around the high costs and reduce its effect on the percentage of revenue. You need a bit of creativity and common sense.

 

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers