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Income statements, too

     Job profitability and the Income statement emphasize different things. Job profitability reports are based solely on jobs, tasks and clients. These reports show details of how much was made or lost on work for a particular job or group of jobs. Even specific tasks can be analyzed for their profit contribution.

      The Income statement includes overhead expenses like payroll, rent and utilities, but doesn't show specifics for the cost of time spent working on jobs like the Job profitability reports. Income statements provide the big picture and Job profitability reports break it down into job-sized details.

     It's profitability from a production perspective vs. agency-as-a-whole perspective. Both reports show important information about how well your shop is doing. Job profitability shows exactly where your revenue is being earned, even showing each client's total contribution to profit. Income statements can't show this kind of detail without a lot of extra work (and hair pulling) on your accountant's part.

     However, the job profitability doesn't include overhead-so it's not a complete picture either. Use both of these reports together for a complete profitability picture. Or use the ultimate profitability report, the Client P&L Analysis.

Easy time keeping

     Tracking how everyone in your shop spends their time is fundamental to the profitability of your business and to Clients & Profits.

With features like interactive lookup lists for jobs and tasks within personalized user time cards, ample space for time notes, and really easy ways to monitor whether or not someone has accounted for every hour of their day, your jobs track every hour worked on them, adding to their profitability. Accounting for every hour worked on a particular job ensures that a job's labor picture is complete on profitability reports like the job's Gross Margin.

Easy expensing

     It's easy to track and charge clients for in-house output, fieries, faxes, long distance calls, CD-Roms and Zip disks with Clients & Profits. "We make an effort to record all miscellaneous costs spent for client jobs," says Alice Mathews of The Tombras Group. "Their billings can account for several thousand dollars over all the jobs we bill in a month. It's very important to keep those job margins up."

Easy billing

     Easy billing contributes to overall profitability, since less time is spent on the mechanics of billing because all the time, expenses and outside costs you've entered flow from job tickets to Accounts Receivable. There's no rekeying of information necessary.

      The simplicity and speed of the billing process means you'll bill more often when jobs are done or when costs are incurred instead of waiting until the end of the month -- so cash flow is improved, too. Details like job specs on invoices and general or very specific descriptions of tasks promote a client's understanding of the work. Fewer questions lead to faster payment.

Make more money

     Armed with the tools to determine which clients and what type of work is most profitable, how you're spending every dollar, and easy ways to track and bill costs, your shop's ultimate product is profit!

Mindy Williams is a senior member of the Clients & Profits Helpdesk. She teaches the new-user training classes and edits the quarterly newsletters.