A very common small business in the service industry is the carpet cleaner. Many owners of such businesses desire to know the margins and of course the associated operating expenses involved.
Service = Timeliness and Accuracy. These are the two primary characteristics every small business needs to understand to provide good customer service. Learn about these two attributes and deliver great customer service.
Service related businesses require a different format than the traditional profit and loss statement AKA the income statement. The traditional profit and loss focuses on sales of products and a corresponding cost of goods sold section to help the reader evaluate the gross margin. But in service, the owner needs a profit and loss statement formatted to key in on overall productivity and costs of that productivity.
In the world of accounting, we stand on two principles; timely and accurate information for the client. Without either, the client can’t make good decisions. As accountants our job is to record economic transactions and report this information in a financial format. For the client it is imperative that the information is provided in a reasonable period of time after the activity.