You will find two words that are often used inter-changeably however in Link Reporting they have a necessary and important distinction.
Unless your practice invoices its engagements 100% on actual time/cost, invoiced value by team member is a meaningless value for you. Why? Fixed fee invoices. Because of fixed fee invoices, invoiced value by staff member does not exist in a relevant way for you or anyone else has some portion of their business invoiced on the fixed fee either in advance or on completion.
You'll see an example of this when you run a WIP Movement report by [Ledger] Staff for any period. There will be a grouping at the bottom called 'Others'. This is made up of invoiced values that are:
b. Interim invoices
An interim invoice is an invoice like a deposit, progress invoice or a fixed fee that is not yet attributed or attributable to people or services. These invoiced values will be attributed to the people and services who worked on these jobs at the time of WIP wash-up (the last possible date for this is the completion of the job). The write ons/offs that occur on this wash-up will have their own write on/off date.
We are invoicing a fixed monthly fee of $500 for an engagement. The first invoice rolls in on 1 July. To whom is this invoice attributable? We don't know yet. The invoice is unattributed and unattributable. We don't yet know who will do this work and even if we had an idea, we cannot yet know the volume, value, variety or people required to deliver all the services in this engagement.
On 7 July Hone does 30minutes work @ a billable rate of $150/hr on a client query. This is all the time incurred in July on this engagement. Should we attribute Hone the full $500 invoiced value to date? Should he benefit from a $425 write-up? No. This is why invoiced value staff member is meaningless for any practice that has any portion of its engagements on a fixed price.
So what can be done to measure an individual or teams revenue contribution to your practice?
Revenue is the billable value of effort contributed in a period adjusted by any write ons/offs recognised in that period. We're giving our people the benefit of the doubt in the period they do their timesheet by attributing them the full value of their billable effort and then adjusting this for historical chickens that have come home to roost in the form of write ons/offs recognised in that period. Write-on/offs are their own transaction with their own transaction date which is either the invoiced date or the date of WIP wash-up.
Write ons/offs can be quite lumpy and we shouldn't look at a single month to judge or extrapolate a person's performance. The greater the period we're looking at, the more stable this metric becomes. The individual performance report is the best reflection of a person's performance.
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