Profitability Reporting

Profitability Reporting

There are several pieces to profitability reporting, and in this article we will show you how to set up each piece and obtain the information you are seeking from the data.

Categories

Categories are used to allow firms to divide certain information for reporting purposes. These can be by office location or department, or anything else you want to sort your financial information by. Centerbase does already have location codes available for use on financial transactions, so feel free to use Categories for a different reporting group.

Set Up

In System Settings > Accounting > General you will see an option to “Track Categories” - turn this on by checking the box.

 

 

Under the same Accounting heading is a new heading called “Categories”; here you can set up as many categories as you need or want to report on.

Note: Each Category name must be unique.

First, click the Add New Category button in the top right of the screen.

In the report filters, you can choose which categories you want to see on the report, or, if you select all any category that has transactions associated will appear on the report. We have intentionally excluded categories that do not have any values.

Enter a Category name and description if needed, the description field is not mandatory. Then click Save on the bottom right of the screen.

 

To edit a Category, click on the hyper-linked Category name. Click Save when you are done.

Use

Once you have turned on Category Tracking and set up your Categories, you are ready to begin tracking. Each transaction (other than billing entries – these are tracked by timekeeper and location) will have a Category drop-down, where you can select which category to assign.

Category Profit & Loss Report

We have created a Profit & Loss report that allows firms to compare their profits across categories. This is found on the regular Profit & Loss Report:

In the report filters, you can choose which categories you want to see on the report, or, if you select all any category that has transactions associated will appear on the report. We have intentionally excluded categories that do not have any values.

When you click Save & Run, you will see a P&L with side-by-side comparisons of each category.

When you click Save & Run, you will see a P&L with side-by-side comparisons of each category.

 

Direct Expense Allocation

Users are now able to allocate expenses directly to timekeepers/employees. When an “Expense” account type is selected in a Journal Entry or Check line item, an option to allocate the expense is displayed.

This opens the Direct Expense Allocation dialog:

The allocations can be entered either as a percentage or an amount and will calculate the other. You do not have to allocate 100% of the expense to an employee.

Burdened Accounts

When setting up your chart of accounts, the firm can choose to make expense accounts as “burdened”. This means that the expenses in that category will be apportioned to fee earners as overhead costs.

For accounts marked as “expense” type accounts, there is an option to mark the account as a burden account.

 

 

When the dialog is opened (by clicking the three dots), timekeepers/employees can be assigned a percentage of the expenses in that account. This means that whenever this account is used, the system will automatically calculate each burdened employee’s share of that register for the time period being reported on.

 

 

 

Unlike direct expenses, these types of accounts must have a burden percent of 100. If the user sets the percentage higher than 100, the system will decrease each employee’s share pro rata to equal 100%.

Reporting

We will be providing firms with a small suite of reports to use for profitability reporting. These are:

1.      Profitability by Timekeeper

2.      Profitability by Practice Area

3.      Profitability by Client

Further reports will be made available based on feedback from customers. A sample of these reports is below.

To access the reports, the user will need to download them from the links at the bottom of this page and import them into their Advanced Reporting module.

Before uploading the reports, navigate to System Settings > Reports Manager > Advanced Reports – Data Objects. Click on the “Include all data” button, then Save.

 

The reports can now be imported by navigating to Advanced Reports Home, and either selecting or creating a folder. Click on the “hamburger” button next to the folder and select “Upload”. Navigate to where the reports have been saved on your computer and double-click to upload. The reports can only be uploaded one at a time.