Building a profitable workshop: Recovering $165K in margin

Running a manufacturing business is a constant balancing act between the workshop floor and the balance sheet. Right now, that balance is under real pressure.

The current surge in fuel prices is flowing straight through jobs — via fuel surcharges, higher freight, and rising costs for materials like concrete, plastics, copper, and piping. Costs aren’t rising in isolation; they’re compounding across every job.

It’s this kind of pressure that can expose hard truths about profitability for small businesses, similar to what one growing Australian fabrication business found when examining their balance sheet more closely. Despite strong demand and a consistently full workshop, profitability wasn’t keeping pace with revenue. Hidden margin leaks across labour and materials were quietly eroding results.

By connecting operational job costing with financial reporting using Gojee, Xero, and Syft, the business gained the real-time visibility it needed to stop the leaks and recover more than $165,000 in annual margin.

The challenge: Visibility beyond the spreadsheet

The business relied on Xero for its accounting, but like many manufacturers, its operational job costing was tracked separately in spreadsheets and workshop records.

This created a significant data disconnect. Leadership could see their overall financial results, but they couldn’t clearly identify which specific jobs were driving profit and which were costing the business money.

When CFO advisor Amanda Fisher stepped in to assist the finance team, she used Syft to analyse Xero data and uncovered a startling insight. The business had a target gross margin of 32%, but was actually achieving only 29.7%. That gap represented nearly $180,000 in lost profit every year.

“As a CFO, the key to decision-making is real-time data. Syft is perfect for visuals that help business owners understand the big picture. But in manufacturing, the devil is in the detail. That’s where Gojee helps uncover hidden margin leaks and bridge the gap between the factory floor and finance.” 

– Amanda Fisher, Xero accountant & CFO advisor

The solution: A connected tech stack

To bridge the gap, Amanda introduced Gojee to manage job costing and workflows directly alongside Xero. This created a seamless flow of data:

• Gojee captures real-time labour hours and material purchases on the factory floor.
• Xero handles the financial transactions, bills, and invoicing.
• Syft translates that data into visual dashboards for margin analysis and trend tracking.

What the data revealed

Once the business had real-time visibility, three common profit leaks emerged:

• Labour rework: One project quoted for 720 hours actually took 845 hours, reducing the margin by over $10,000. Annually, labour overruns cost the business approximately $95,625.
• Materials price variance: Quoting based on estimated costs rather than confirmed supplier invoices led to $66,000 in annual margin erosion.
• Low-margin jobs: Analysis showed that smaller, complex custom projects often disrupted workshop productivity. One $75,000 project achieved only an 18% margin, far below the 30% expectation.

The results: From reactive to proactive

Armed with these insights, the company adjusted its quoting strategy and began prioritising higher-margin work. Within 12 months, the results were transformative:

Today, the business doesn’t just work harder; it works smarter. The machines and the team haven’t changed, but the visibility has. By moving from reactive reporting to proactive decision-making, they have turned a busy workshop into a highly profitable one.

Explore apps in the Xero App Store to see how  Xero + connected apps help to uncover hidden profits in your business:

• Explore Gojee to streamline your job costing.
• See how Syft can transform your Xero data into powerful financial insights and comprehensive reports.