VPVI-64 · 2019. 11. 13. · •Mobile CRM and Time & Expense •Do not have Performance Management...
Transcript of VPVI-64 · 2019. 11. 13. · •Mobile CRM and Time & Expense •Do not have Performance Management...
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VPVI-64Project Planning + Revenue Methods =The Ultimate Revenue Forecast
Larry George
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Chief Financial Officer- Partner, Architect with other responsibilities
Director of Accounting- Full time Accounting (CPA), the Real Deal
Director of Project Performance- Architecture and IT background
- Vision Administrator since implementation
- Coordinate 10 Group Operations Leaders
with 50+ Project Directors across 5 Studios
Project Accountants- Two full time and one part time
- Billing, AP, Plan Management, Project Director
Support
Accounting + Finance at RATIO
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Why I Attend Insight
• First Deltek Conference - Spring 2007 in Orlando
• 7th Insight
• Tips – How to’s
• Learn how others work and use the tools
• Gain Insight into what’s next…
• Workflows, UDIC’s
• What can I take back to benefit my company?
• New ideas, Best Practices, Inspiration
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Getting to Know You
• Who does NOT use project planning?
• Anyone use Activities?
• Anyone mastered Managing Vision Dashboards?
• Custom revenue methods?
• Using Vantagepoint?
• Any SQL masters in the house?
• Custom Reporting gurus?
• Anyone have a great forecasting system?
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Planning
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Vision Environment• 7.6 Basics + Resource Planning, CRM,
Visualization
• Newforma – first work with CCG
• Payables Approval and Tracking from CCG
• Synthesis from Knowledge Architecture – “Upshift”
• OpenAsset
• Mobile CRM and Time & Expense
• Do not have Performance Management – yet. ?
• Limited use of iAccess
• Analysis Cubes
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Setting the Stage.
• Advantage to Vision 5 in 2007
• Primary drivers for implementation
- Labor Planning
- Forecasting
- CRM
- Organization Reporting
- Dashboards = Real time data
access
• Now five studios in three times zones
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Setting the Stage..
• Using Project Planning since the
beginning.
• WBS = Project, Phase, Task
- (Task = Discipline)
• 90% of revenue from fixed fee contracts.
• 40 - 45% of gross to consultants
• Every billable project has a plan
- Currently 370+ active.
- Fees range from under $1,000 to
over $20,000,000.
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•Fees flow from plan toproject
•Fees, staff, and consultants aremaintained
at every phase /task
•Calendar format is usuallySemi-Monthly
Setting the Stage...
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•Project Number
- Add number to namefield
for display on all tabs
•Additional Editors
- Enable specific others
to edit plans
•Project Stage
- Plans with issues
- Allows us to discountthe
forecast bystage
Planning Tweaks
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Forecasting the Old WayCopy orCut
Paste
Reproportion
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• Manually allocating fee for every plan, level, and
period is labor intensive and error prone.
• Schedules change and we don’t work to the plan.
• Does not support org reporting at lower levels.
• You can’t forecast negative revenue.
• Who can we trust to maintain the forecast?
• I always thought there had to be a better way.
• The forecast should simulate the revenue
method.
So What’s the Problem
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So What’s the
Solution?
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• Current Revenue = JTD Revenue - Prior Revenue
• Rev Gen calculates Gross Revenue. Consultants and
expenses are subtracted to report Net Revenue.
• Custom Revenue Methods allow us to calculate Gross
Revenue and report Net Revenue independent of client
invoices or consultant vouchers.
• The Key Components of Rev Gen include:
- Actual posted labor cost
- Actual Consultant and Other expenses
- Planned labor
- Planned fees
- The Revenue Generation method
Revenue Generation
Show Me The Money!
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• Bill_F Net = % Billed * Net Fee + Markup
- Different from normal Billed in that it applies the
billed % to just the net fee
- This is used when labor is minimal or sporadic.
• Hourly Net = Labor @ Bill Rate + Markup
- Typical hourly billing
• Fee_R Net = Labor % Complete x Net Fee + Markup
- This accounts for at least 90% or our revenue.
- Labor must be recorded to calculate % complete.
Revenue Methods
95.37%
3.43%
1.21%
FEE_R HOURLY BILL_F
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The Revenue Master workflow setsthe
Revenue Method at all lowerlevels
Managing the Methods
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Labor Tab Configuration
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One Night At
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• Fee_R : Net Revenue = labor % complete x net fee*
• JTD Labor, ETC Labor, and Net Fee drive the forecast
• Current month Calculation:
- Recalculate Net Rev based on EAC EM.
- Subtract prior net revenue.
- Add Net Rev forecast for this period based on new EAC
EM.
• Future months forecast at the new EAC EM.
* For mockup purposes, reimbursable markup and consultant fees are not addressed
Mocking up Fee_R Logic
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Build the Logic in Excel
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Play Time
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• Involved CCG initially to help create custom reports.
• Used the excel spreadsheet to describe the objective.
• Started working with Darrell Aaron with CCG
• Worked through conversion of the Excel idea into SQL.
• Darrell did initial work on his own but much of the later work
was us sharing a screen and talking through issues and
possibilities.
• Through this process I set aside the idea of developing a
custom report in favor is Excel Pivot tables.
• I’ve been using Analysis Cubes for years, so this was a
natural.
Phone a
Friend
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SQL Happened
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Pivot to Excel
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Pivot Table Fields
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Plan Variance Tracking
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Excel Does Charts
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Full Project Reporting Capabilities
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Org Reporting at Lower Levels
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Customizing Custom Reports
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Timing Considerations• Reporting is only correct when the current period
follows a closed period.
• Excel solution; the current period is manually editable
by me.
• Vision custom report: the current period is taken from
the users Vision instance.
- The problem is the time period between when a new
accounting period is opened and the financials for
the prior period are completed. This is 7-10 days
when the report is likely not accurate.
- Need to educate users when to set Vision to the
prior period when that period is not yet closed.
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Negative adjustment from prior
earned revenue is caused by
either added future labor,
reduction of net fee, or both.
Forecasting Negative Revenue
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How Accurate is it?
• If you record exactly the hours planned, it’s perfect.
• Be careful to not over plan staff.
• Most PD’s are overly optimistic about
- How soon work will start
- How soon it will be complete
- How much time will be spent
• Direct Expenses do not earn revenue so will
have a negative impact on Net Revenue.
• We Discount Forecasts for Firm Summaries
- Active plans to 90%
- Imminent plans to 75%
- Uncertain plans to 15%.
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•Make required input
fields more obvious.
•Add drop down fields
for survey responses.
More Tweaks
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