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How Outdated Cost Rates Almost Put Quality Printing Out of Business.

Inaccurate budgeted hourly rates (BHRs) can put a printing company out of business as one company found out the hard way. Quality Printing* is a sheetfed, digital, and large format printing company with 75 employees located in the Midwest United States.

The budgeted hourly cost rates they used for estimating, pricing, and job costing was indiscriminately updated over the years. When they finally updated their rates using, they found that their old rates had significantly impaired their revenue, efficiencies, profit margins, and growth.

Unknowingly, Quality Printing was selling less expensive, short-run work below their cost. This was causing the organization to drift towards smaller, less profitable work, which required more administrative costs and machine setups, and ultimately lowered the organization's profits and efficiencies.

Quality Printing also found that larger, more expensive jobs were being over-estimated, overpriced, and lost to the competition. This caused excess shop capacity, lower productivity, and reduced revenue.

For years Quality Printing had been deceived by the estimating and costing figures used for pricing and measuring job profitability. If Quality Printing had not updated their BHRs with CostRatesAdvisor, they would continue to lose profits and eventually gone out of business.

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"The BHRs we calculated with CostRatesAdvisor significantly improved our pricing decisions, revenue, and profitability. Now we're processing less orders, but at higher profit margins. We learned our lesson the hard way."
- John, President

* Quality Printing is a fictitious name. The company did not want to be identified.
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