Mortgages, equipment leases, credit lines: a small manufacturer often accumulates several kinds of borrowing over the years, each on its own terms. Without a clear overall view it is easy to lose sight of what they weigh together each month, and therefore of what every job ought to cover.
Categorise to understand, not just to tidy
Separating borrowing by category — loans, equipment leases, short-term credit lines — helps you see not only what must be paid each month but also which part of that repayment is tied to a specific productive investment and which is general company debt.
The effect on hourly cost
Monthly repayments, added to fixed overheads, feed directly into the calculation of your true hourly cost: they are outgoings that must be covered whatever the month's workload. Ignoring them when setting prices means, in effect, charging them to your margin instead of to the customer.
Maturities and refinancing in good time
Keeping an eye on maturities — when a lease ends, when a credit line expires — lets you consider refinancing on better terms in good time, rather than discovering an imminent deadline when your room to negotiate has already narrowed.