October 23, 2023

How to Track the Cost of Your Finishing (And How to Reduce Those Costs)

Having a detailed knowledge of your costs is the first step to finding places to reduce them and increase your profitability.

Investors working on desk office and using a calculator to calculate

You probably already have a robust system in place to track the cost of your printing — otherwise you wouldn’t be able to accurately estimate jobs and ensure everything that goes through your shop has a profit margin that keeps the lights on, the equipment running, and your people employed. But are you truly accounting for the entire cost of the project, from start to finish? Specifically, are you accurately tracking the cost of your finishing work?

Tracking costs both for entire jobs and on a per-piece basis is critical to ensuring profitability. It’s also an important step when it comes to finding ways to reduce costs throughout your operation without cutting quality or increasing turnaround times. In fact, you might have unexpected and unnecessary costs impacting your bottom line right now, you just don’t know it.

Breaking Down the Costs

When it comes to ensuring you are pricing finishing work correctly, knowing the exact costs to run every piece through your equipment is the first step. And there are a few things to keep in mind — most of which will be familiar to you if you’ve ever done this process for your printing equipment already.

  1. The cost of the equipment itself. Just like with your printing equipment — be it offset, digital, inkjet, toner, textile, etc. — the first thing to keep in mind is the initial investment into the machine, and how you are spreading that cost out throughout the lifetime of the equipment. This process should be very familiar to anyone who has done an ROI assessment on their presses — just don’t forget to do it for every piece of finishing equipment you operate as well. It doesn’t matter if it’s a large machine that can cut and fold direct mail in the thousands of pieces per hour, or a tabletop laminator that requires an operator to run one piece at a time. Make sure you understand the basic price you need to charge per piece to cover that investment.
  2. The cost of maintenance. Of course, just like with a press, you can’t just put a piece of complex finishing equipment on a pressroom floor and expect it to run flawlessly all day every day without effort. Do you need a maintenance contract, or can your operator perform the daily, weekly, or monthly tasks required to keep it running at full speed? Does it require specific materials to maintain, such as washes, to ensure it is clean and running correctly? What about parts or service if something breaks beyond what your staff can handle? Factor all of this into the cost of the machine, and make sure your pricing reflects it.
  3. The cost of labor. Speaking of operators, you’ll need one or more people who are trained to run your finishing equipment. Depending on the complexity of the equipment and the size of your shop, that might just mean getting your press operator a bit of training, or it might mean hiring additional personnel to run that side of the business. Either way, just like with the other equipment on your floor, you’ll want to invest in training to ensure your operators are making the most of the finishing equipment, using it to maximum effect and keeping it in perfect condition to always be ready for the next job.
  4. The cost of substrates. This might be the one cost you have already considered, and it should absolutely be part of the estimating process. While some finishing, such as folding or cutting, don’t require adding anything else to the print job after it leaves the press, others add things like foils, coatings, or lamination — all processes that come with their own substrate costs. Make sure you know what you’re spending on those finishing substrates, and how they impact the cost it takes to produce your jobs.
  5. The cost of your time. Finally, how long will that job take to run? Is it a simple cut or fold that can run though the equipment at the fastest rated speeds? Or is it a complex spot coating job that will need to be carefully run to ensure only the right areas are impacted? When determining your finishing costs, make sure you consider how long each job will tie up the equipment before the next can be run.

Reducing the Costs

Now that you have an idea of what the finishing portion of each job is costing you per piece — which also means you can determine how to price each job correctly — now it’s time to start finding ways to reduce those costs without impacting anything else.

  1. Equipment: This is one where there isn’t a lot you can do to reduce the cost once you’ve made the investment. But you can take the time to research any new equipment, understanding what it will be used for and how it will help you grow your business. Go through the cost exercise before you buy, to get a rough idea of what you would need to charge for the finishing of the jobs you’re already doing. If it’s something new you’re adding to your shop, how much more revenue can it generate? If it’s the ability to offer something you already do faster, cheaper, or for higher quality — or ideally all three — how will that impact your costs? Breaking all of that down ahead of time means there are fewer surprise costs to contend with later.
  2. Maintenance: This is one of those areas where it might seem counterintuitive to invest in regular maintenance places — after all, that’s not cutting costs, it’s adding them — but look at the bigger picture. How much would it cost if something breaks due to being worn or not maintained correctly? How much would it cost if you must refinish — and REPRINT — a job because of faulty equipment? How much would it cost if your finishing department goes down completely, and jobs are left waiting? Spending both the time and money for regular maintenance will decrease your overall costs over time.
  3. Labor: Especially now where many are struggling to find good people with the right skills, consider looking at automation options. You might have automated quite a bit in your prepress and printing departments, but you likely haven’t done much in finishing. Are there any areas you can streamline and reduce the number of touches needed?
  4. Substrates: This is one area you might be able to really trim your costs if you’re willing to spend some time researching and talking to people. There are tons of options out there for every type of finishing substrate — some better than others, and some more available than others. Don’t stop investigating new options as they come to market, get samples, run them through your equipment, see how they compare to what you’re currently using. Talk to both your current suppliers and those you’re considering — do they have a less expensive option you can try that might work just as well? It never hurts to ask, and to keep asking and exploring new innovations. Just don’t skip the step of testing the materials and having a good idea of the pros and cons before you roll something new out to your live jobs.
  5. Time: Are there things you can do to reduce the amount of time it takes to run a job? Can you suggest a simplified fold that will still get the message across? Perhaps limit the number of places a foil needs to go, or the amount of coating needed? Finding ways to simplify finishing will not only save you cost — they will also give you something you can take to your customers to reduce their costs as well to show them you’re working to be their partner.

And those are just a few things to keep in mind when you’re determining the costs of your finishing, and how to reduce them.

denise gustavson

Guest Blogger

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