Have you ever priced a job and then when it comes to buying materials discovered your margins are out? Or have you ever struggled to keep track of what materials you need and what you’ve already purchased?
Chances are, you’re going to say yes. It’s really annoying when these things don’t go to plan and even more frustrating when you end up losing money from simple mistakes.
The truth is, there’s a lot to think about when pricing a job and with the current state of the market, with prices fluctuating and costs soaring, it’s more important than ever to get pricing right. The thing is, with so much to do and a lot to think about it’s easy to make mistakes.
So what about a bit of software that sorts everything for you? Too good to be true? Actually, this software already exists.
Let’s take a look at how you can use it to improve your business.
If you haven’t heard of Payaca already, then there is so much to this software that you’re going to love.
Essentially Payaca helps you manage and organise all your trade business processes, allowing you to quote and invoice, manage your jobs, process new leads, automate your communications and much much more.
If you’re interested in learning about some of Payaca’s best features check out our blog on the best quoting and invoicing software features for service businesses and our piece on how to convert more leads, or simply check out Payaca’s website and discover all their features for yourself.
But for this blog, the key functionality we want to look at is job management, more specifically managing materials and prices. So how does it work?
Imagine you’ve just taken on a new client, and they’ve just asked you to build a new garden room. There are a few things you need to think about.
You need to create a quote, based off the price of the individual materials you need and the margin you want to set. You also need to decide where you are going to source your materials and check what you already have available. After that, you need to purchase materials, begin work on the project and then deliver an invoice. This all needs to take place within a set timescale and will likely involve communicating and coordinating your team. All this can be managed through a single job management software.
With Payaca, you can track and organise all these processes from one platform, organising all your different tasks while keeping on top of all your costs and jobs that need to be done.
The concept behind material lists is straightforward, it’s about keeping track of what you have, what you need and where you’re going to get your supplies from.
If we return to the garden room example, there are a few different aspects you need to consider. If the completed garden room is the whole item, then there are various materials you will need to be able to build and assemble that item. You also need to purchase these materials from a supplier.
That’s quite a few things to think about.
Within Payaca, the hard work is done for you. Within your account, you can link individual materials, such as wooden beams or a box of screws to the overall item - which in this case would be the garden room.
This means, that you can easily see what materials are needed to deliver any item, making quantifying your prices far easier. Everything is laid out for you in a clear, easy-to-use format that makes keeping track of all your materials super simple.
What’s more, Payaca has partnered up with the supplier Williams, meaning all the data from their supply is already ready to go for you to use. It makes it quick and simple for you to work out the materials you need to deliver an item and calculate prices for the job.
You are able to very easily record where you’ve purchased your materials and at what price, so if you use one supplier to source a certain material, but a different supplier for another material, you can record that and track where you are making your purchases.
For more information on managing your materials and how to keep on top of rising costs, check out our post on How to manage your material costs for your service business.
The other issue many tradies have to deal with is keeping track of purchases. You need to know what you have bought, what you still need to purchase and which supplier you want to go to.
Using the Payaca software you can update all this information so you never lose track of what you’re doing.
Once you’ve sent you’re proposal and it’s been accepted by the customer, you need to keep track of all your purchases and ensure you’ve got what you need. Essentially you need a shopping list that records what’s bought and what still needs buying.
Let’s return to the garden room example.
You have sent your proposal and have included several different materials linked to the garden room item that you are going to provide. Each material you are using is also assigned to a few different suppliers. So now you need to record what’s been purchased and what still needs to be bought.
With Payaca it’s simple, for each material, within the accepted quote, you can mark each individual material as purchased or leave it as still to be bought. Furthermore, you can assign individual prices to each material so you can easily adjust your costs.
This means all your costs for each material are clearly visible along with information about where these materials can be purchased from and info on which preferred supplier you want to use.
So now you’ve got all your materials recorded and organised into a clear list that is easy to manage. You know which materials you still need to purchase and how much they cost, the next thing to think about is your margins and markup.
Maintaining your margins is an essential part of managing your business, you need to decide how much you want to make from any project and factor that into your prices. The only issue is, prices don’t stay the same and sometimes you have to go to different suppliers to deliver the same end product.
What happens if there is an unexpected rapid increase in prices? And what if one material increases but the other goes down slightly? How do you keep on top of that?
Well, Payaca can sort that for you.
When pricing your items outside of a deal, you can assign a set markup so that you always make what you need off any individual item. You can set this as a percentage or as a flat figure that is added to your price. These prices are then reflected in the final invoice that your customers will receive.
Once you have priced all your items, Payaca will automatically total up your prices and display the margin you will make, including that figure as a percentage.
Essentially what all this means is, your prices are always kept up to date. Everything is clear and transparent and you can easily keep track of your costs. You avoid the shock of discovering you’ve priced something wrong and finding yourself out of pocket. Everything is taken care of.
For a more detailed look at how this works, check out our video guide on how to keep your sales prices up to date.