It was as a direct result of this debacle that we started checking and validating every individual sale (after survey) for a minimum profitability based on our suppliers’ order confirmation costs, and we calculated all other actual selling and fitting costs as well. Everything was held (with all suppliers, these were custom-made goods) until the process was completed, and once signed off by our accountant, released to be manufactured.
There was a spreadsheet designed for the weekly throughput, listing each contract and its costs and the sum total, plus actual margins achieved based on these real costs – the only future variables would be unforeseen mistakes or fitting cock-ups.
The margins started to build and build: we developed a thorough understanding of our break even point – probably for the first time – and we never did MATCH PRICING or PAR PRICING again. In the end, there were 13 spreadsheets linked to the production of the monthly management accounts, as well as: our order books, our stocks, our debts, and other vital financial information that the previous accounts system just didn’t cater for.