Agency Project Profitability Reporting
Having the ability to quickly report on agency profitability is one of the most powerful things an agency can do - if you can report on profitability, you can strive to increase profitability, right!
In contrast, having to wait for your accountant to give you their profitability analysis weeks after the period has closed is of precious little use day to day when you're making important decisions.
What if a job has just begun to show worrying indications that it won't be profitable? You need to know urgently. It might be only half way to completion, so there's time to bring it back into line. But only if the stark facts are brought to your attention right away. Profitability reporting can do this.
While you're at it, you also need to know which phases of the job contributed to profitability the most, and also what types of job bring you the best margins in the first place. All this helps you to steer your agency forward more safely and of course, increase profitability.
Agencies can be complex entities. They often take on a wide variety of jobs and projects, and key individuals often work on multiple jobs in the same time frame. External resources often have to be brought in for specialist work or to help during peak times. Deadlines change, priorities shift, circumstances alter. You can't possibly know the profitability impact of it all unless you have the right tools to support you.
Good decisions are hard to make under pressure if you don’t have all the facts at your fingertips. Everybody in your team may seem constantly busy, but what percentage of this month’s hours spent were truly productive? And if not as many hours as you'd like have been productive, are you going to hit your forecasted profit?
Two types of agency profitability reporting
With Synergist, there are two relevant agency profitability reports. These reports can be automated reports, scheduled to go at set times and to set people. Or you can pull them off whenever you need them:
- Period profit reports
- Job profit reports
Between them, they will give you such details as:
- Total time booked against each job and phase.
- Materials used in each job and phase.
- Client name, and job / client / phase handler / teams involved.
- Recognised income, i.e. work delivered irrespective of invoice payment, with summaries of deferred and accrued sums.
- Profits, markup percentages and margin percentages.
- Types of jobs involved.
- The original quote for the job.
- The amount invoiced.
- Gross profit and gross margin percentage.
- Net profit and net margin percentage.
In each report you can control how much you want to see, by use of filters.
Filtering the reports
When choosing the profit reports you wish to see, you can filter them in various ways. For example you can report by final invoice date, or in client order, or only show purchase values, or only show jobs that have been quoted for, or are currently live, or are currently on hold, and so on.
We hope this article has helped you see the power of immediate and accurate agency profitability reporting.
If you enjoyed this piece, you may also enjoy 6 key steps to managing multiple projects more profitably.
Or if you want to learn how the Financial Director of successful agency Tayburn cut his month end in half, using Synergist's financial reporting, you can learn about this in our Tayburn user story.