Full P&L Breakdown (For Plumbers)

Ensure your QuickBooks is set up correctly, placing technician payroll, benefits, taxes, and job supplies in COGS for an accurate gross profit calculation. If your bookkeeper isn't doing this, request the change.

Gross profit indicates 'on-the-job' issues (technicians, materials), while net profit (after overhead) highlights 'off-the-job' or administrative problems. Use this distinction to pinpoint where to focus your improvement efforts.

Regularly review your material costs by comparing price book accuracy to actual supplier invoices. Address discrepancies and ensure technicians are sourcing materials from preferred, cost-effective suppliers.

Implement commission structures or incentives that encourage technicians to accurately bid material costs, as this can significantly improve material efficiency and reduce 'lost' money on jobs.

Track labor efficiency metrics like 'job time efficiency' (bid vs. actual time on site) and 'global efficiency' (hours sold vs. available work hours) to identify slow technicians, inaccurate bidding, or unproductive time.

Actively manage overhead by scrutinizing software subscriptions and services; eliminate those that don't provide clear ROI. Maintain a lean and efficient office structure, especially for a growing field team.

As a business owner, demand direct admin access to your QuickBooks. Regularly review your P&L, delve into individual line items to understand expense categorization, and identify any abnormal or miscategorized spending.