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Overhead Creep Detector and Calculator

FreeAbout three minutesProfit and margins
What it does

Compares your overhead growth to your revenue growth and flags the category moving fastest.

How it helps

Overheads creep up quietly, and every dollar of creep comes straight off profit. This shows whether your costs are growing behind your revenue, where they should be, or quietly ahead of it.

How this benchmark is calculated

The comparison you see is an indicative ProfitPulse benchmark, drawn from our own internal commercial ranges. Treat it as a commercial signpost, not a formal industry survey and not financial advice. We move the range to suit your broad industry, your business size and how commercially complex it is.

In about three minutes, free, you will see their overhead growth against revenue growth in percentage points, the fastest growing category, and what disciplined cost growth looks like.

Overhead Creep Detector

Answer a few quick questions to see where you stand.

How the overhead creep figure is calculated

The formula

Overhead creep = overhead growth per cent minus revenue growth per cent over the same two periods.

Worked example

If revenue grew from 1,000,000 to 1,100,000 dollars, that is 10 per cent, while overheads grew from 300,000 to 345,000 dollars, that is 15 per cent. Overheads are growing 5 points faster than revenue.

How to read your result

Below revenue growth is operating leverage working for you. Worth a closer look means overheads are quietly outpacing revenue. Significant opportunity means cost growth is absorbing your profit growth, which a focused review reverses.

What each figure means

  • Revenue for the last 12 months: Your total sales for the period, before any costs are taken out.
  • Revenue for the prior 12 months: Your total sales for the period, before any costs are taken out.
  • Total overheads for the last 12 months: Running costs that do not scale directly with each sale.
  • Total overheads for the prior 12 months: Running costs that do not scale directly with each sale.

Common questions

What is an overhead here?

A running cost that does not scale directly with each sale, such as rent, software, insurance and admin wages.

Why compare growth rates, not totals?

Costs growing faster than revenue is the early signal of margin erosion, well before the totals look alarming.

What should the rule be?

As a guide, overhead growth should trail revenue growth. The result flags the category moving fastest.

How ProfitPulse can help

If overheads are outpacing revenue, our fractional CFO support ties every cost to what it earns and applies a keep, fix or cut decision to each line.

More from ProfitPulse: what our work costs, building cash flow discipline and a fractional CFO in Sydney.