Created effective Voll­kosten­rechnung and financial planning from existing financial data to enhance decision making for contractor businesses of all sizes

We developed a tailored and specific Excel-based "Vollkostenrechnungs-Model" for a small (2.5M EUR revenue, 25 employees) German contractor business, helping optimize the calculation and proposal process, leading to significant profitability improvements 

 

Specific situation:

  •  Small contractor business in Germany (2.5Mn EUR revenue, 25 employees), was in financial trouble due to bottom-line always being lower than expected, despite almost full utilization of capacity all year for two consecutive years
  • Together with development of overall turnaround measures (including bank communication and reporting for over 1.5 years), we identified incorrect assumptions around cost base per hour worked and proposed to investigate

 

Results achieved:

  • First, we reviewed the key metrics of the business and quickly identified incorrect assumptions were made around total "productive" time worked vs. actually "billed hours" worked of staff, not considering all relevant calculatory costs and potential risks and various other critical issues
  • With that, we built a detailed Excel-based model to calculate actual full costs per hour worked across various sheets of assumptions
  •  Result was an increase of hourly anticipated costs of 20% - this was incorporated into the company's own planning tool (Label software) and led to better proposals as well as turning down of several potential projects that were going to not lead to any profit and use up capacity
  • Over time, profitability of the business increased by over 20%