Overhead Rate (hourly)
To help you better calculate your profitability, there is a field in Location Settings where you can enter your overhead costs for each location.
This number is an hourly rate, keeping in mind there are 24 hours in a day. Here is how we recommend you calculate this number:
- Add up all of your monthly bills for a location, i.e. rent, utilities, internet, cleaning, etc.
- If you have any bills/expenses that are not billed monthly, divide them down to a monthly equivalent.
- Add the monthly pay of any salaried employees and/or owners draws.
- Multiply that number by 12 (months).
- Divide that number by 365 (days).
- Divide that number by 24 (hours)
- This number is your hourly overhead rate, plug this into the "Overhead Rate" field.
By calculating everything with an hourly rate you will be able to monitor break-even/profitability progress down to the current day (you can also view for the week, month, quarter, and year). The system will automatically calculate the rest of the important numbers:
- total revenue = income + other income
- total costs = cost of goods + returns & allowances + indirect labor + operating costs(overhead rate)