. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Posted in Legal Law

Put value in your time with zero dollar checks for off-payroll homeowners

In previous articles we have talked about entering our time in QuickBooks. So what do you do with the information after you enter it? How many of you really know what your profitability per customer is?

One of the most common things I see among business owners is that they don’t value their time. Most business owners are DBAs or LLCs. As you know, these types of companies do not accept paychecks, but raffles. So how do you calculate the value of your time?

Another important aspect of knowing the value of your time is making sure your billable rates are high enough. If you’re covering overhead and actual costs, but don’t know how much you’re “paying yourself” or if money is tight when it comes time to run your drawing, these steps will allow you to see in “black and white” just how much you need to raise your rates, why you can’t take your draw, and what steps you need to take to make sure it doesn’t happen again in the future.

Before you start on this, you need to think about how much money you want to make this year and break it down into an hourly rate. If you normally spend 40 hours in the office, use that as a base. Use this formula: Annual Salary divided by 2,080 (52 weeks X 40 hrs per week) = Hourly Rate. Be sure to account for vacation time and extra hours if needed.

The next step is to set yourself up as a provider and set a fee in the article to code what you provide services for. Link the expense side to a payroll account or owner’s salary account.

Step 1: Create a check and allow it to pull your time from your timesheets. If you notice all the detailed posts in the article tab, please note that we are not going to pay for all of this ourselves.

Step 2 – Click the expense tab and post a negative dollar amount to the payroll account.

Step 3: Save and close the transaction.
Now when you run the profitability summary of your job, you have the actual cost of your time, and you can see if your margins are within 70% of what you billed for. If they are not, your price is not high enough. Always keep in mind that 1/3 of the cost goes to overhead, 1/3 of the cost goes to direct cost, and the remaining 1/3 goes to you, the owner.

Check out other articles on how to streamline your billing process, all from your time log.

admin

Leave A Comment