Differentiating Between Margin and Markup
Jun 28, 2023As an accountant and someone who deals with business lingo all day every day, I often forget that a lot of the terminology that we use is not common knowledge to the general public. I have to remember this regularly when working with clients to ensure that they properly understand what I am stating.
A common confusion when working with clients is the notion of markup vs margin. Though similar, these two terms have one distinct difference. Tune in to hear this broken down into simple terms that anyone can understand.
The key takeaways from this episode are:
1. Understand common business terminology: Recognize that not everyone is familiar with the specialized language used in accounting and business. As professionals, it's important to communicate complex concepts in a way that clients can easily understand.
2. Differentiate between margin and markup: Learn the distinction between margin and markup, which are often confused. While similar, these terms have a significant difference that affects pricing and profitability.
3. Use a practical example: Break down the concepts of margin and markup using a relatable example to help grasp the differences and understand how they impact business calculations and tracking.
What you'll hear in this episode:
[0:58] Most of us accountants speak the language of business and often forget that clients do not inherently understand all of the words that we use.
[2:15] Clearing up some of the confusion between margin and markup.
[3:15] This example should help you break down and understand margin vs markup.
[7:15] My recommendation on tracking markup vs margin.
Related episodes:
Get Back In The Driver’s Seat Of Your Business Finances
How to Generate Cash Without Increasing Price
Tips for Negotiating Business Deals
Resources:
Tactical Resources:
5-Day Financial Mindset Refresh: https://www.keepwhatyouearn.com/refresh
Create a Custom Podcast Playlist: https://quiz.tryinteract.com/#/6303d4c525b1e80018d47cfa
Grow Cash Flow for Your Business: https://www.keepwhatyouearn.com/endless-cash
Tax Deduction Guide: https://www.keepwhatyouearn.com/tax-deduction-guide
CFO Power Session: Text POWER to 860-609-6374
See how much you can save with an S Corp: https://www.keepwhatyouearn.com/keep-what-you-earn-s-corp-calculator
Additional Resources & Connect with Shannon:
Find everything you need at https://www.keepwhatyouearn.com
Questions about this episode? Text me! https://my.community.com/shannonweinsteincpa
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The information contained in this podcast is intended for educational purposes only and is not individual tax advice. Please consult a qualified professional before implementing anything you learn.
