This article is an extract from the book 'Everything you need to know about Xero Practice Manager'
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Practice reporting rhythms
In our practice we want to implement regular reporting rhythms so we can run a successful and profitable practice that our team loves to be a part of. There are key metrics we want to keep an eye on weekly, others monthly, and some we review on a biannual basis. We must ensure the information we are looking at is accurate and relevant to the decisions we need to make.
All the data we need to make good decisions is in XPM. In some cases the reports are available within XPM, but many of the metrics we want to track such as productivity and write-offs are just not readily available. XPM is also unable to produce key metrics such as average hourly rate on staff, jobs or even at a practice level. For this we need Link Reporting.
In this section we will look at the reports available in Link Reporting, when they should be viewed, and what decisions we want to make with the information. Here are the reports available in Link Reporting:
- Open Job
- Client Performance
- Client Profitability
- Team Performance
- Individual Performance
- WIP Performance
- WIP Comparison
- Practice Performance
- Service Profitability.
Let’s look at what reports we run and on what frequency.
There are three reports that should be run on a weekly basis: The Open Job report, the WIP Comparison report and the Individual Performance report. The Open Job report is best run during a weekly stand-up meeting with your team. The purpose of this meeting is to identify any jobs that are at risk of going over budget or missing a deadline. By having this meeting on a weekly basis, we can help our staff who are struggling or falling behind on their workload. The Open Job report allows us to look at what is happening right now, and what we expect to happen in the near future.
The WIP Comparison report is a great report to run on a weekly basis to keep an eye on your WIP balances. Your WIP is your first bank account so if you check your bank accounts weekly, you should certainly be checking your WIP report weekly to see how it is evolving. Using this report weekly gives you a gut feel for how your practice is going.
The Individual Performance report is a great report to run on a weekly basis to ensure our team is on track to hit their monthly targets. This does not need to be done in the weekly stand-up meeting as the reports can be set up to automatically send to everyone's inbox as a PDF from Link Reporting. Weekly productivity is something that can be reviewed by each staff member in their own time.
The Open Job report allows you to see what is currently happening in all open jobs, and where you need to focus your attention. The report is grouped by job manager by default, but this can be easily changed to a number of different options depending on how you would like to view the report. You also have the option of applying filters to reduce the overall list, to make the analysis more streamlined.
The Open Job report is the easiest way to see which jobs are at risk of going over budget or missing their deadlines. The best way to quickly view this is to run the report, then use the sort high to low function in the table for two fields:
- Projected write-offs
- Days till Due.
Projected write-offs allow us to easily see which jobs are likely to go over budget. Sort this column from low to high to see the jobs that are projecting the highest write-offs and discuss what can be done to complete the job as quickly as possible. Alternatively you can speak with the client about renegotiating the fee if there were unexpected complexities in the job.
Days till due shows how many days until a task within the job is due for completion. By sorting this field from low to high we can see which jobs need to be worked on in the upcoming week to ensure no deadlines are missed. If someone has too many tasks for the upcoming week, or has a number of overdue tasks, you can talk to your clients to move the deadlines, or move the tasks onto another staff member who has the available capacity.
Think of the WIP Comparison report as a housekeeping report. It helps us identify jobs that have fallen off someone's radar, and jobs that have not been closed correctly.
The WIP Comparison report shows all the movements that happen within a specific period, and are grouped and subtotalled by a chosen field. There are two great ways to run this WIP Comparison report:
- WIP by Job Manager
- WIP by Job State.
Running the WIP Comparison report by job manager allows us to easily identify jobs that have high WIP balances. Run this report then sort the closing WIP column from high to low. All the jobs with high WIP balances will be brought to the top so we can quickly review them. If a job has a large WIP balance and has no time entered for the month, this is very high risk because the job is stagnant with a large WIP balance. These jobs often result in a write-off, so it’s important to speak with the job manager when they are found.
Running the WIP Comparison report by job state allows us to check that jobs were closed correctly. You should never have WIP on a completed job. If you find this, it would indicate the job was completed by accident, someone forgot to invoice it or the WIP wash-up was not done.
Productivity is a metric that should be reviewed on a weekly basis to ensure billing targets are met. Rather than logging in and reviewing this in front of everyone at the weekly stand-up meeting, the easiest way to do this is to ‘Schedule and Send’ a weekly PDF report to each staff member. You can do this by running an Individual Performance report for a particular staff member, hitting ‘Save’, then scheduling the report to be sent to the staff member’s inbox each Monday. This allows staff to see how they are tracking against their KPIs. If their productivity is down, it means they might need to work a little harder in the upcoming weeks.
To help your team leaders, use the Individual Performance report to schedule and send a report for the previous week so they can see how their team is tracking against their KPIs. This report should be used as a quick check to ensure all staff are on track to meet their targets. If they spot anything concerning in the PDF, the team leader can login to Link Reporting to further analyse the non-productive time for their team member who is not tracking well. You can help your team succeed by providing them the information they need at www.linkreporting.com
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