Finance doesn't have to be a mystery—it can be your greatest advantage. In this episode of the Machine Shop MBA series, we sit down with Jon Hughes, Erik Skie, and Mike Estes from CliftonLarsonAllen (CLA) to unpack the financial principles that separate high-performing shops from those that just get by. Together, they dig into how manufacturers can transform their accounting systems from mere compliance tools into strategic assets that fuel growth. From understanding capacity and pricing to mastering forecasting and job costing, this conversation bridges the gap between the shop floor and the balance sheet. CLA's experts explain why simplicity often beats complexity, how to avoid "bad business" when chasing volume, and why aligning cost structure with capacity utilization is the secret to consistent profitability. They also explore how automation and advanced equipment investments change the financial equation, why separating costing from pricing is essential, and how the best-run shops use forecasting not just to plan—but to learn. Whether you're running a $3M job shop or a $30M operation, this episode gives you the tools to make smarter financial decisions and build long-term resilience. Segments (1:03) Recapping Nick's trip to EMO in Germany (1:52) Meet the guests: Jon Hughes, Erik Skie, and Mike Estes from CLA (4:38) Grow your top and bottom-line with CLA (7:06) Keep it simple: Capacity vs. demand (the key to unlocking consistent profitability) (9:19) Why labor is effectively a fixed cost in modern manufacturing (12:21) When increasing capacity is a smart risk and when it's not (15:08) Activity-based costing and why not all machines should share the same rate (16:38) Why we love Phoenix Heat Treating for outside processing (17:47) How to price automation and capture its true value (20:30) Separating cost from price & matching pricing strategy to niche and capacity (25:06) The danger of underutilized automation and inflated rates (27:09) How customer communication improves quoting accuracy and margins (28:38) The "death spiral" of bad quoting assumptions (30:57) Understanding your cost structure vs. chasing perfect accuracy (32:46) Material-heavy jobs, overhead allocation, and avoiding double-dipping (35:25) Demystifying EDM technology with Methods Machine Tools Bill Burba (49:17) Forecasting and budgeting: why they matter beyond the numbers (52:35) Linking your business model to your P&L for smarter decision-making (54:23) How to use forecasting to test your assumptions (56:05) Killing unprofitable jobs ("deselecting customers") and improving mix (1:01:10) Meet us at Top Shops 2025 in Charlotte, NC Resources mentioned on this episode Grow your top and bottom-line with CLA Why we love Phoenix Heat Treating for outside processing Get more information about EDM technology from Methods Machine Tools Business Model Canvas Meet us at Top Shops 2025 in Charlotte, NC Connect With MakingChips www.MakingChips.com On Facebook On LinkedIn On Instagram On Twitter On YouTube

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“What did the council decide on item 42?” — answered with the speaker and the moment.