Symbility is a powerful estimating software used by many in the insurance and restoration industries. Knowing how to accurately account for overhead and profit is crucial for ensuring your business's financial health. This guide will walk you through the process of adding overhead and profit margins within Symbility Online, helping you create accurate and profitable estimates.
Understanding Overhead and Profit
Before diving into the Symbility process, let's clarify the difference between overhead and profit:
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Overhead Costs: These are the indirect costs of running your business. They aren't directly tied to a specific project but are essential for operations. Examples include rent, utilities, insurance, administrative salaries, and marketing.
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Profit Margin: This is the percentage of revenue remaining after all costs (including overhead) are deducted. A healthy profit margin ensures your business's long-term sustainability and growth.
Adding Overhead in Symbility Online
There are several ways to account for overhead in Symbility, depending on your preference and how you manage your business finances:
Method 1: Percentage Markup on Labor and Materials
This is a common approach. You add a percentage markup to both your labor and material costs to cover overhead.
Steps:
- Determine your overhead rate: Calculate your total annual overhead costs and divide by your annual revenue. This gives you an overhead percentage.
- Apply the markup in Symbility: Symbility doesn't have a direct "overhead" field. You'll need to adjust the labor rates and material costs. You can do this by inflating the cost of each item by your calculated overhead percentage. For example, if your overhead rate is 15%, you would increase the cost of each item by 15%. This will need to be done manually for each line item or you may need to work with your Symbility administrator to explore other options (if possible) to streamline this process.
Method 2: Separate Overhead Line Item
Some prefer to create a separate line item for overhead. This provides more transparency in your estimates.
Steps:
- Calculate your overhead per project: This method requires you to estimate the overhead costs allocated to each specific project. This might be based on project size, labor hours, or a fixed amount.
- Add a line item: In Symbility, create a new line item labeled "Overhead" and enter the calculated overhead cost for that particular project.
Method 3: Using a Multiplier
You can achieve this by calculating a single multiplier that incorporates both your overhead and desired profit margin.
Steps:
- Calculate the combined markup: Determine the percentage representing your desired profit margin. Add this percentage to your overhead percentage to derive a single markup value. For example, if your overhead is 15% and your desired profit margin is 10%, your multiplier would be 1.25 (1 + 0.15 + 0.10).
- Apply the multiplier: Multiply your labor and material costs by this combined multiplier to incorporate both overhead and profit in one step. Again, this often requires manual application per line item.
Adding Profit Margin in Symbility Online
Once overhead is accounted for, adding your desired profit margin is the final step.
Methods:
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Percentage Markup: Similar to overhead, you can add a percentage markup to the total cost (including overhead) to achieve your desired profit margin. This again may necessitate manual line-item adjustments.
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Fixed Profit Amount: Add a fixed profit amount as a separate line item.
Tips for Accurate Overhead and Profit Calculation
- Regular Review: Regularly review and update your overhead costs and profit margins to ensure accuracy.
- Detailed Tracking: Maintain meticulous records of your expenses and revenue.
- Consult a Professional: If you're unsure about the best approach, consult with an accountant or financial advisor.
Optimizing your Symbility Workflow
Remember that accurately reflecting overhead and profit is crucial for the long-term success of your business. While Symbility doesn't offer a direct built-in feature for this, understanding the available methods and implementing them consistently will ensure your estimates are both realistic and profitable. Consider exploring options with your Symbility administrator to optimize your workflow for greater efficiency. Implementing these strategies can significantly enhance your business's bottom line.
