Why You Must Track Small Tool Costs

Every tradie knows the feeling of walking into the supply store and picking up a few extra drill bits, blades, or small hand tools. Because these items seem inexpensive individually, many business owners neglect to track them against specific jobs. Over a year, this 'small' spending creates a massive hole in your net profit.

By failing to assign these costs to a particular quote, you are effectively subsidizing your customers' projects with your own hard-earned cash. You should be accounting for every consumable, from heavy-duty tape to specialty drill bits, within your initial job estimation. If it isn't tracked, it isn't being recouped through your invoices.

The best way to fix this is to implement a simple system where your team reports consumables used on-site before a job is marked as closed. This allows your office admin to adjust the final invoice to include these costs accurately. You will be surprised at how much 'hidden' expense this process reveals in your monthly management reports.

Take the time to review your supply bills every fortnight to see exactly how much you are spending on minor hardware. Use this data to update your standard material markup percentages. Taking control of these small leaks in your bank account is one of the fastest ways to improve your business's overall health.