The busiest year, not the best
The factory was full all year. The accounts show a thin profit. The owner's instinct is that the big T-shirt contract was fine and the small tailoring orders were a headache, but nobody has checked. When the accountant asks which customers and product types are profitable, the honest answer is that nobody knows.
Every style was costed. The costing sheets are in a folder. None has been looked at since the order was confirmed.
Costing happens once, reality happens later
The costing is a prediction. What actually happens on an order (fabric use, line efficiency, rework, overtime, outwork, air freight, claims) is recorded, if at all, in different places, and never brought back to the costing.
- Actual fabric use is not compared with the costed consumption.
- Line minutes achieved are not compared with costed SAM.
- Overtime and weekend working are charged to the month, not the order.
- Outwork, rework, air freight and claims are not tied to the style.
- Accounts see the monthly totals, not the order-level picture.
What not knowing costs
Without order-level margins, the factory keeps quoting similar prices for styles that lose money, and turns away work that would have been profitable. Negotiations with brands happen without evidence. Efforts to improve are aimed at whatever feels like a problem rather than what the figures say. And the owner works harder each year for the same result.
The costing sheets themselves never improve either. If the collar on a certain shirt style always takes longer than costed, the next shirt is costed with the same optimistic minutes, because nobody ever closed the loop. The error is built into every quote until someone looks.
A style margin report built from what you already record
- The costing for each order is held with its components: fabric consumption, trims, SAM and minute rate, extras.
- Actual fabric use comes from cutting records, actual minutes from line output and hours, trims from issues to the line, and outwork from subcontractor invoices.
- Overtime, air freight, rework and claims are tagged to the order they relate to, from payroll, freight invoices and the claims log.
- The report shows each order and style with costed against actual, component by component, and the resulting margin.
- Figures can be grouped by brand, product type and season, so patterns show: which brands' claims eat the margin, which product types run slower than costed.
- Findings feed back into the costing tool, so the next quote for a similar style starts from better numbers.
| Component | Costed from | Actual from |
|---|---|---|
| Fabric | Marker consumption | Cutting records |
| Labour | SAM and minute rate | Line output and hours |
| Trims | Bill of trims | Trim issues |
| Extras | Allowance | Outwork, overtime, freight, claims |
The accounting figures stay in your accounts software, such as Xero or Sage. We read from it where needed; we do not change your books.
Knowing where the margin went
The owner can see, order by order, where the costing held and where it did not, and whether the problem was fabric, minutes or extras. Pricing conversations with brands come with evidence. The styles and customers worth chasing become obvious, and so do the ones worth repricing.
It also changes month-end. Instead of a single profit figure that nobody can explain, the owner and the accountant can see which orders pulled it down, and the conversation moves from worry to specific decisions about prices, brands and product types.
Could you answer these today?
- Which styles last season made less than costed?
- Which brand's orders cost the most in claims and extras?
- Do tailored styles really earn more than jersey?
- Was the overtime last month tied to a particular order?
- Are your costings getting more accurate over time?