Another accounting approach

Using activity-based costing can help your company save money

Finding ways to cut costs—and increase profits—is a priority for every roofing contractor. But doing so can be risky and challenging.

"If there's a new and improved product or piece of equipment that will allow us to work more efficiently, we're interested," says Mike Gasaway, general manager of Culver Roofing Inc., Gary, Ind. "But we have to be sure we're not sacrificing quality."

"You've got to be creative," adds Jerilee Mattingly, secretary/treasurer of Weatherguard Metal Construction Inc., Sierra Vista, Ariz. "To stay competitive, we're always trying not to raise prices. And we're always looking for ways to cut costs and save money."

During the past two decades, many businesses have adopted a new method of computing the cost of their products and services. The method is known as activity-based costing (ABC).