Understand how your fixed price engagement with a client compares financially to hourly amounts using the Project Profit Margin Analysis Report. Sometimes you aren’t billing customers by the hour, but you still want to understand the worth of your team’s time compared to what the client is paying you for your fixed fee engagement.
Figure: Project Profit Margin Analysis
A few reasons to use the report:
- Review how the fixed price engagement compares to the time billable amount for a project using the Recovery Percentage metric
- Assess the profit margin for both the time billable amount and fixed invoice amount with respect to the budget and actual time costs
- Make future contract decisions based on your findings on this report
The report display is divided into the following three sections
- Project Details
- Fixed Price vs Time Billable table
- Profit Margin Chart
Section 1: Project Details
This section shows the basic information about the project along with the Budget Type and Billing Method for the project. The Fixed Invoiced Amount is also displayed here.
Section 2: Fixed Price vs Time Billable table
This section is split into two main parts
- Fixed Price: Shows how the profit margin for the Fixed Invoice amount compares with the budget and actual time cost amounts
- Time billable: Shows how the profit margin for the Time billable amount compares with the budget and actual time cost amounts
The section is concluded with the Recovery Percentage which represents the percentage of time billable amount recovered using the Fixed Invoice Amount. It is calculated using this formula: Fixed Invoice Amount / Time Based Billable Amount
Section 3: Profit Margin Chart
The chart illustrates the profit margin for both fixed price and time billable amounts compared to the actual and budget time cost.
Customers: Select the customer(s) you want to run the report for. You can select one or more customers as needed.
Projects: Select the project(s) you want to run the report for. You can select one or more projects as needed. You can only choose a project after one or more customers have been chosen.
Customer Budget: The total fixed amount the client has agreed to pay
Timesheet Approval Status: Choose which status of timesheets you want to run the report for. Statuses include: Draft, Pending, Approved, Automatically Approved and Rejected.
Do you have any questions about Avaza Reports? Please contact our support team via chat or email.