Decline in profits due to price cut by State for client services
The California State Regional Center cut prices by 10% for client services resulting in a significant decline in profits. One possible response was to cut salaries et al, resulting in a decline in morale. However, before this was done, we analyzed revenue generating methods using client’s operating software, employee interviews, and financial tools. Discovered mismatches in payroll hours, scheduling and client contract hours.
After aligning and tracking operational performance, billings increased by over 30%; most of it going to the bottom line. Company declared a bonus instead of a salary cut.