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The Audit: How to Find Out What Your Business Is Actually Doing
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Publisher: Independently Published
Pages: 256
Weight: 0.69
Height: 0.64 Width: 6.00 Depth: 9.00
Language: English
Your bank balance is right. Your profit and loss is right. Then you open one job and you cannot say within a thousand dollars what it made.
That is the normal condition of a business that sells jobs, and it is not a bookkeeping failure. A job's cost is not a number you hold. It is a number you assemble, weeks after the work is over, out of documents that arrive from other people on other people's clocks.
Five things stack up. Cost lands late. Cost lands in the wrong column. Cost lands on the wrong job. The credit never lands at all. And the rate was never written down.
Not one of them is carelessness. Every one is a document arriving from outside your business in a shape nobody chose. Together they make your job numbers unusable while every total you look at still reconciles perfectly, which is exactly why nobody catches it.
THE AUDIT is the method for finding out which work was actually worth doing.
Twelve rules of evidence, each one written after something went wrong. How to reconcile a year of payments in a single day without opening a document until the sorting is finished. How to audit labor when nobody ever wrote the price down. How to audit material, a single job all the way to the bottom, and what happens when a bookkeeping error comes out of somebody's paycheck.
How to audit the arguments that are not about money at all: whether your lead distribution is fair, whether your territory map is lying to you, what the driving costs, and which of your lead sources is quietly the worst one.
And one chapter on every time this method produced a confident wrong answer, what caused each one, and what rule came out of it. Almost none of them were bad data. Almost all of them were a bad instrument or a bad denominator.
It came out of a live residential contracting company and one full year of real audits.
WHO THIS IS FOR
You sell jobs. A discrete piece of work, priced before it is done, built by people who were not in the room when it was sold, whose true cost arrives from third parties weeks after the customer already has a number.
Contracting, installation, field service, restoration, landscaping, cleaning, equipment work, fabrication to order.
If your cost of goods is known at the moment of sale, or you sell hours against a rate card, this book is not for you, and it says so on the first page rather than on page ninety.
No software required. Every method in this book has been run in a spreadsheet.
ABOUT THE AUTHOR
JD Davenport is the creator of Company Framework, where he develops written standards and tools for contractors and other businesses that sell jobs. His work on contractor operating systems spans job costing, sales operations, compensation design, production systems, and process automation. He writes practical methods drawn from the systems he builds and audits.
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