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How Do I Choose the Best Break-Even Software?

Article Details
  • Written By: K.C. Bruning
  • Edited By: John Allen
  • Last Modified Date: 06 November 2018
  • Copyright Protected:
    2003-2018
    Conjecture Corporation
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The best break-even software to pick depends upon the needs of the business owner. There are both stand-alone products and modules that come as a part of a suite of programs. Stand-alone products are typically simple programs that provide quick answers about the status of and prospects for a business. A suite that includes break-even software typically offers many tools that provide the business owner with a big picture view.

Break-even software tends to work best when it covers a variety of scenarios, from current status to annual revenue. Good break-even software will typically consider both the total variable and total fixed cost. Variables are costs which change throughout the year and from year-to-year. These are sometimes unexpected events. Fixed cost items, such as rent, never or rarely change over the course of a year and may even have little variance on an annual basis.

The best break-even software usually gives the user the option to create several different scenarios in order to determine the best course of action. It will use past and current performance factors such as number of sales and revenues to find break-even values. A simple interface that plots this information on a chart is often the easiest to use.

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It can be most beneficial to use a stand-alone break-even software product if a business is in search of a simple, inexpensive option. These programs can be used specifically for creating strategy. The primary drawback is that they do not provide as robust an experience as modules that are integrated with a larger suite.

While break-even software modules that are a part of a suite of software can be more expensive and possibly more complex to use, they can also be more meaningful overall. This is primarily because they are a part of a comprehensive financial system which may also include modules that manage valuation, forecasting, and other similar elements. These kinds of programs may also be integrated so that once one body of information is entered it can be accessed by other modules, which can simplify the data entry process.

The break-even point is where a business covers its costs, but is not profitable. Break-even software can help an organization to devise ways to lower that point. It is a tool to be used in the continual process of improving the efficiency with which a business is run. This helps to increase profit margins.

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