In different industries, there are various numerical data that can make or break an owner or first-time entrepreneur. Transportation companies that operate vehicle fleets must monitor dozens of data sets. In manufacturing environments, the same principle holds true. No matter what kind of small company, medium-sized firm, or large corporation you look at, one of the core duties of managerial staff members is related to numerical information. Consider the following examples of different kinds of entities and how each one relies on precise quantitative data to achieve financial success.
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Commercial Vehicle Fleets: Engine Operation Hours
Fleet managers who work for transportation firms monitor dozens of quantitative and qualitative parameters every minute of the day, but the need to keep tabs on engine hours is of paramount importance. That’s because fleet management revolves around factors other than safety and routing. Supervisors also focus on vehicle wear and tear, and engine hours are the single most direct way to pinpoint that statistic.
One aspect of fleet management involves measuring the number of hours engines are running, even when not in motion. Armed with hours-of-operation data for each truck under their control, managers have a better idea about when to schedule preventive maintenance, bill for the use of equipment, measure fuel consumption, and measure total hours of engine idling. It’s imperative for supervisors of vehicle fleets to learn the most effective ways to keep track of total engine operation time for every truck they oversee.
Retail Merchants: Profit Margin
Profit margins are at the heart of virtually every decision retail managers make. In short, the metric measures the percentage of profit on a given sales price of a product or service. In the grocery business, margins tend to be very low, around 1%-2%, while in the automobile dealership niche, they are much higher. It’s almost a given that retailers know their current margin percentage to the second decimal point; that’s how relevant it is for their total income. There are several formulas for calculating margin, but the most common one is to divide revenue minus costs by revenue.
Accounting & Law Firms: Billable Hours
The bottom-line metric for CPAs (certified public accountants) and lawyers who work for large firms is known as billable hours. Even though most such firms have variable rates for each billed hour, the number has come to be the single most relevant productivity measure for professionals who offer their services to the public. One reason standard hourly pay or salary methods don’t work well is that they can’t accurately account for non-billable time. One-person firms also use the billable hours system in most cases. You can potentially use management software to help with tracking but in some cases the accounting will still not be perfectly accurate.
Personal Service Companies: Booked Sessions
Hair stylists, massage therapists, estheticians, and nail techs usually charge per session. Of course, there are upgrades for extras, but the standard accounting system uses a session-based method for calculating income and profit margins. In large salons, owners want a daily count on how many sessions were booked and delivered each day. There’s no other way to figure out long-term profits and see which employees contribute the most to the company’s bottom line.
