With this information, you will be able to evaluate certain problems in your agency. You may find that you are estimating jobs too low, or you are using your most expensive staff on clients with smaller budgets. With the knowledge provided by profitability reports, you will be able to take steps to correct the problems. The two systems work together, but run parallel. This enables you to run profitability reports for the job and client, or to look at company profitability as a whole.
Profitability reports, like job reports, pull information from the job tickets.
The criteria for running profitability reports are by job and billing status, and by job activity date range. Financial statements only use data from the general ledger. The criteria used to print the statements is the fiscal period. The labor cost is calculated with the standard cost rates that are set up in the Staff file. When time sheets are added, the standard cost rate in the Staff file is multiplied by the number of hours on the time sheet.