2021 NAID & PRISM International Conference: Using metrics to better run your business

While sales play a crucial role in the company’s profits and success, they are not the only thing a company should look at. During the 2021 NAID & PRISM International Virtual Conference, which took place April 13-15, two specialists discussed how company owners should maximize their profits by tracking and managing their expenses.

Tobi and Steve Innerfield of New Jersey-based ShredMetrics, a consulting firm for document destruction businesses, argue that the cost of goods sold (COGS), the expenses that go into selling a product, are as important as tracking a company’s profits.

“It’s not just about the sales,” said Tobi Innerfield, the manager of ShredMetrics. “To maximize profits, you need to look at the relationship between sales and expenses.”

The presenters noted two reports that help track this: profit and loss statement and balance sheets. These reports assist business owners by showing changes over a set period and what the company owns and owes at a single moment.

Tracking a profit and loss statement gives business owners the chance to see what has changed and how it affects the business. Some of the ways this helps business owners spot costs that have increased, such as labor as a percentage of revenue and repairs.

"Your profit and loss statement is not something your accountant uses during tax time,” said Steve Innerfield, the founder and chief technology officer of ShredMetrics. “It’s a living document. Every quarter at minimum, you should be a student of it and study every category changing; you get to take action quickly.”

Steve Innerfield says that another factor that affects a company’s profits is route optimization. Finding the best routes includes examining driver logs for mileage and operating hours, the profit and loss statement and balance sheet.

By taking the total amount of expenses that go into operating a truck and dividing them by the total miles a truck has driven, Steve Innerfield says a company can find out how much money it is spending per mile.

“Pricing your jobs without understanding your costs is a sure way to lose money,” Tobi Innerfield said.

Some of the ways a company can improve its bottom line include optimizing next day stops every night, never letting drivers have a locked daily schedule and eliminating repeat trips to the same area.

Steve Innerfield said mapping helps a company visualize its choices and that bad stops do exist. Companies should look at their customer lists and map out a route with their drivers to maximize routes.

“Not every stop is worth having,” Tobi Innerfield said.

The presenters said that improving driver compliance is another way companies can improve their bottom lines. By using tracking software, onboard cameras and location sharing, owners can know where their trucks are at all times. This way, owners can make sure truck drivers are following the planned route.

The last thing the panelists discussed was looking at an accounts receivable (AR) aging report. By looking at the AR aging report, companies can keep track of collections and catch things before they become issues.

“Pay as much attention to collections as you do to sales,” Tobi Innerfield said.