In the world of finance and administration, “margin” is one of those terms that is often dropped but not always well understood. Many entrepreneurs look at their turnover and profits, but forget that margin is actually the driver of healthy growth.
In this blog, we dive into what exactly it is, why it is crucial to your business operations, and how TriFact365 helps you monitor it.
What is it?
Margin is the difference between the selling price of a product or service and the cost you incur to deliver it.
There are several types:
- Gross margin: sales minus direct costs (such as purchasing).
- Net margin: what remains at the bottom of the line after all costs.
- Operating margin: profit from core activities, excluding interest and taxes.
A healthy margin means you not only make a profit, but also have room to invest, absorb risks and future-proof your business.
The danger of underestimation
Many companies focus on revenue growth, but that can be misleading. High turnover with low margins can lead to cash flow problems, especially if customers pay late or costs rise unexpectedly. Margins provide insight into the efficiency of your business model – and that is where true financial grip begins.
The link with TriFact365: insight and control
TriFact365 helps organisations automate and streamline their administrative processes. But there is more to it than just convenience. One of the features that contributes directly to management is automatic cost allocation.
With this feature, you can:
- Link costs directly to projects, departments or products, allowing you to see exactly where your margin comes from – and where it disappears.
- Faster and error-free processing of purchase invoices, giving you real-time insight into your cost structure.
- Processing entries in various accounting packages.
These insights allow you to steer in a more targeted way: adjusting prices, addressing inefficiencies or negotiating with suppliers.
Margin is not an accounting formality, but a strategic steering tool. With TriFact365, you not only get a grip on your administration, but also on the future of your business.
