Setting the Standard - Administrative
In this series of articles we want to take a look at the RTC Standard Chart of Accounts for the Home Inspection Industry. This structure is a foundational building block of our Accounting Service. We will discuss why we set up the chart of accounts the way we did and what we do with it.
Part 3 - Admin
Administrative expenses are are the infrastructure that supports the business. These costs include the expenses required to manage a home inspection job that don't include the actual performing of the inspection. Expenses such as the scheduling software, call center costs, and liability insurance all are included in this area. Other key costs include the overhead expenses such as rent, utility costs, office supplies and legal fees. Often these types of costs tend to be more fixed and do not fluctuate with the volume of inspections like costs in other areas.
Being a sort of catch-all, admin expenses and functions have the potential to be put on the back burner. Savvy business owners know, however, that these are vital to managing and growing operations and profitable businesses leverage the admin function to generate ROI. Often these costs can creep up over time and are good to review annually for potential cost savings.
Our industry specific chart of accounts breaks down the admin spend into categories relevant to the inspection industry. We break out payroll to ensure that the employees that wear multiple hats have their various hats put in the correct function. This ensures we can engage in meaningful budget analysis, comparison to industry metrics, and helping grow your bottom line.