On behalf of JA Inc., it is my privilege to inform you of our complete satisfaction with Ivan and his time, scope of work completed, and changes implemented in our business. We are excited about the direction the business is headed, with the main goal to reduce operating costs in order to increase profit margin.
Our management team thoroughly believes that the benefits to be gained by implementing the changes Ivan has presented will positively impact our business, especially in dollars saved. We estimate the cash return to be from 1% (120,000) to quite possibly up to 20% (2 million). We still have a lot of work ahead of us, but our management team is committed to the job. I have been able to work steadily with Ivan on each of the programs developed, and once we are through our harvest season, Nick and Frank will be able to devote more time to the program.
The cost analysis, planning and budgeting, and margin mix have begun to show us how to more accurately account for our costs, develop actual fees, bill out our costs and fees for each operation, track our time and expenses, all in a manner that will bring more profit to our operating company. In using the programs, I have already seen a direct impact on time and money saved. My office is now able to track, account, and bill outside vendors more accurately and efficiently. For example, instead of our typical delay of 4 to 6 months to bill customers, I am now able to send out an invoice in 2 weeks.
The interest savings on that particular bill was $2,500.00. If I am able to be timelier with 5 vendors on 10 bills each, that is a savings of $125,000. The ability to accurately track our labor is developing and being implemented through management meetings and scheduling. By evaluating each employee’s performance, we are now cognizant of how our employees are utilizing their time.
This is done by reviewing time sheets on a weekly basis. We have been able to direct questions to team leaders who have been able to correct hours worked as needed, thus accurately tracking our labors costs. Knowing our cost for custom operations will give us a more accurate account of whether or not we should outsource an operation, or if we need to plan and complete the operation ourselves. In the past, we have not had an accurate base line of what our costs are.
We now can objectively evaluate and plan our operations and inputs in real time, as opposed to using historical data. This can prove to be a huge opportunity for cash savings. We will only know once we have spent the time utilizing the programs, an inputting our own data budget. Finally, the biggest return on investment we see for our business is to maximize our margin mix.
Currently, we have not had the ability to accurately evaluate the break-even point of sales, or have a profit plan. Even though we cannot control commodity pricing, we can control our decisions to be profitable, basing those decisions on zero-basis budgeting, rather than past history.
Product or Service Mentioned: International Development Services Consulting Service.
Reason of review: Good quality.