Digital printing calculation: How to keep your costs under control

When digital print shops agree fixed sales prices or graduated price lists with their customers, some rely too much on their gut feeling. They judge whether a framework agreement is actually worthwhile on the basis of their own experience and rarely on the basis of reliable figures. This puts them in a blind flight with an open outcome. In this article, we explain possible starting points for accelerating and detailing the calculation of costs in digital printing – even for very short runs.

Not every format yields a profit. Nevertheless, even within the framework of a fixed contract, finer cost calculations are worthwhile in order to determine a statement about produced areas, generated sales prices and costs in the trades. This enables digital print shops to uncover their inefficient work processes more quickly. The economic reasonableness of the agreed sales prices can also be regularly reviewed and renegotiated if necessary. To make this possible, print-specific calculation parameters such as area calculation (sqm prices), margin processing (running meter prices) are absolutely essential. Even if there is actually not enough time for a detailed calculation or the effort is not worthwhile at first glance due to a small order volume.

How can it be done anyway?

Before the actual cost calculation, some basic work processes should first be scrutinized and optimized.

Administration offers a great deal of room for maneuver. Incoming orders should be recorded quickly so that they can be used for production and for generating subsequent documents such as delivery bills and invoices. Duplicate entries must be avoided at all costs, as a lot of time is spent on this and the error rate is very high. However, even with accelerated processing of print jobs, a comprehensible and uniform structure of the individual items must be maintained, as it must be used for production planning and internal allocation. This approach should be the same for all jobs, no matter what the order value or complexity.

What does a commercially correct and detailed calculation of costs in digital printing look like?

The individual price calculation in digital printing

In the case of individual orders without a price specification, digital printers have more freedom of design. As a rule, therefore, greater commercial administrative effort is worthwhile. Production and material costs are finely calculated on an industry-specific basis. Special features such as determining the print direction for material optimization or ink consumption can be taken into account. It is thus possible to address specific costs on a more individual basis.

When costing individual objects without a fixed price agreement, the costing software should offer these options for fine calculation:

• • Choice of printing press
  • Choice of material
  • Optimization of material utilization
  • Consideration of production modes for time/cost calculation
  • Consideration of preliminary services such as data processing, test prints, etc.
  • Further processing such as laminating, laminating, cutting according to machine, material, time, personnel time
  • Determination of the manufacturing costs for a product
  • Calculation of a sales price

The individual price calculation is the commercially correct approach and theoretically desirable for every order. However, especially in the case of small quantities and tight framework agreements, there is no time for it. Therefore, it is rather unsuitable for a quicker cost calculation.

To ensure that digital printers do not have to do without the sophisticated functions of professional costing software and maintain an overview despite limited resources, there is another option:

Cost calculation with predefined sets

Quotation preparation is semi-automated as part of the price agreement with customers. In this process, services are put together in modular form in preparation for job planning and in compliance with the fixed price agreement. Later, the sets are called up to simplify quotation entry and inserted uniformly into the quotation by sales staff. This significantly reduces processing times and ensures a clear and consistent cost structure.

Detailed costing, showing what is necessary.

An exact, internal calculation based on predefined sets not only saves employees a lot of time. It also prepares all further steps in production. However, it is not uncommon for customers to knock on the competitor’s door with their detailed quotations and ask for a counter-offer. To prevent this, the quotation can be issued to the customer so roughly that no competitor can recognize the type of production.