Imagine the result Bookings and Backlog Imagine the result.
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Transcript of Imagine the result Bookings and Backlog Imagine the result.
Imagine the result
Key Financial Metrics Gross Revenue
Net Revenue
Net Revenue Multiplier
Financial Billability
Operating Income (Income after Corporate Overhead)
Return on Net Revenue (Income percent of net revenue)
Bookings
Backlog
DRO (Days Revenue Outstanding)
Imagine the result
Why Do Bookings
and Backlog Matter?
Backlog defines contracted workload by division and business unit
Helps to project hiring needs and balance workload
Allows management to measure sales versus burn rate and workload projections
Measures success of client development efforts at division, business unit and client levels
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Bookings“The Basics”
Definition: The amount of Net Revenue that will be earned on a project
Basic Calculation:
Total Compensation minus (Subcontractor Cost Budget + ODCs Cost Budget)
In other words: Labor Revenue + Subcontractor Markups
Who gets credit? Client (Primary Client)Market Sector or Market Area (assigned to Client)Business Unit (Project location)Division (Project location)
When is it calculated?
Calculating nightly to appear in Roll Based Reporting
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Terminology Bookings
Metric Contract Value Net Booking
Subcontractor Compensation
$15,000 cost + $1,500 markup =
$16,500
$1,500
ODCs Compensation $500 cost + no markup
$0
Labor Compensation $3,000 $3,000
Total Contract= $20,000
Booking = $4,500
Project Success = Company Success
Imagine the result
Backlog“The Basics”
Definition: The amount of Net Revenue that is “left” to earn on a project
Basic Calculation: Total Compensation minus the greater of (Subcontractor Cost Budget + ODCs Cost Budget) OR (JTD Subs and ODCs) minus JTD Net Revenue
If Revenue Group: Adds all phases together
Who gets credit? Client (Primary Client)Market Sector or Market Area (assigned to Client)Business Unit (Task location)Division (Task location)
When is it calculated? Calculating nightly to appear in Roll Based Reporting
Impact of Project Status: If entire project is made Dormant, all backlog is dropped
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Terminology Backlog
Project AB009999.00001
Contract Value Net Backlog
Task 00001Location TFS30
Environment, SER3, Tampa
Labor Comp $5,000Subs $500 + 10%
markup ($50)
$5,050
Task 00002Location TOSI0Infrastructure,
Strategic Services, Toledo
Labor Comp $5,000Expenses $450 no
markup
$5,000
Task 00003Location TOWN0
Water, Water North, Toledo
Labor Comp $5,000 $5,000
Total Contract = $16,000 Backlog = $15,050
Project Success = Company Success
Imagine the result
Bookings & Backlog
Relationship
“Key Equation”
Beginning Backlog Balance
+ Plus: Bookings Added
Less: Net Revenue Burned
= Equals: Ending Backlog Balance
Imagine the result
Debookings “The Dark Side”
Data entry correction – we entered a project forecast through Plan without an accurate cost budget and “over booked” and then “debooked” the next month
ARCADIS subcontracts work (labor) that we originally planned to do increasing the EAC expenses and reducing the EAC DL.
Prevention – plan contingencies as subcontractors rather than labor so we don’t over-book at the start
If project JTD subs + ODCs are higher than the total sub/ODC cost budget in VISION, the actual JTD expenses are used in the calculation
Imagine the result
Bookings/Backlog“Month 2 and beyond - “Now it gets tricky”
Backlog calculation doesn’t change – all project changes will flow through to new backlog
Total Compensation minus (Subcontractor Budget + ODCs Budget) minus JTD Net Revenue
What impacts the backlog calculations?• Project had an increase or decrease in compensation• Project made dormant, backlog will now be zero• Cost budget was entered or changed• If project JTD subs+ ODCs is higher than the total sub/ODC cost
budget in VISION, the actual JTD ODCs are used in the calculation
Backlog can be negative at the task level as long as the project in total has positive backlog
Bookings calculation is really the same but we now need to consider what might have changed so….
Bookings = Current Backlog minus Previous Backlog plus Current Net Revenue
Imagine the result
Bookings & Backlog
Reporting
Roll Based Reporting
– Bookings and Backlog Detail
– Client Profile