For what time periods should I run the profitability reports? Can I compare the profitability reports to the financials to verify that jobs are being updated correctly? Where do profitability reports get their numbers? The Profitability FAQ has all the answers:

Q. How can profitability reports help me run my agency better?

The profitability reports will show you the clients, jobs and tasks that are profitable and the ones that are not. With this information, you will be able to evaluate certain problems in your agency. You may find that you are estimating jobs too low, or you are using your most expensive staff on clients with smaller budgets. With the knowledge provided by profitability reports, you will be able to take steps to correct the problems.

Q. How does Clients & Profits ASAP integrate accounting and production?

The financial accounting system in Clients & Profits ASAP is fully integrated with, but separate from, the job tracking, costing and billing of the production side. This enables you to run profitability reports for the job and client, or to look at company profitability as a whole.

Q. Where do profitability reports get their numbers?

Profitability reports, like job reports, pull information from the job tickets. The job ticket is updated when costs and billings are posted. Time entries and expenses are also posted to the job ticket. The criteria for running profitability reports are by job and billing status, and by job activity date range.

Q. How is the labor cost calculated on profitability reports?

The labor cost is calculated with the standard cost rates that are set up in the Staff file. When time sheets are added, the standard cost rate in the Staff file is multiplied by the number of hours on the time sheet. The cost amount is included in the labor cost on the job ticket.

Q. How can I look at actual labor costs instead of labor costs calculated with standard cost rates?

Using actual labor costs can make it difficult to compare clients and jobs from different time periods. A staff person will have a lower cost rate during months when they work a lot of overtime. This will mean that jobs your agency works on during slower periods will appear less profitable than jobs worked on during your busiest periods.

Q. How is "gross margin" calculated?

Gross Margin looks at the estimate and budget amounts on a job ticket to project what a job's gross margin will be when the job is finished. Gross Margin is the job's estimate minus budget. The budget amount on a job ticket usually represents the estimated cost to you for hard costs on the job.

Q. For what time periods should I run the profitability reports?

Profitability reports can be run for any range of dates that you want to review. You can also limit the reports to jobs with certain status codes. If you are looking at Gross Margin reports, you may want to evaluate all of the jobs that are currently active. These are the jobs that will be affecting your bottom line in the next weeks and months. If you want to compare the profitability of your clients, then you may want to limit the report to closed jobs. Open jobs may not be able to show you an accurate picture of your profitability because of timing issues. You may have all of the costs recorded on a job but not the final billing, or you may have prebilled the job and have not recorded any costs yet. Print the report for jobs with a specified range of start dates or closed dates; a range of several months will help smooth out any seasonal fluctuations

Profitability reports can also be limited to a range of work dates (i.e., the date the work was done). This will let you isolate your agency activity for a period time. If you want to know which client or AE has been most profitable over the last six weeks, then run the report for the six week work date range. This will pull all of the billing and cost activity for that time period.

Q. Can I compare the profitability reports to the financials to verify that jobs are being updated correctly?

No. Because the information on the reports and the criteria used to pull that information differs, profitability reports can't be reconciled to financial statements. Each type of report is useful for analyzing profit in a different way. Looking at profit from two different sides gives you a larger picture, but don't try to "mix apples and oranges."