This article outlines steps to forecast gross profit per month in Streamtime, based on the quotes that have been created in your system.
This process is suitable for organisations that have a monthly profit target that needs to be met to cover costs such as salaries, rent etc. The goal of forecasting here is to know how much gross profit the agency can expect to get in a specific month.
It is not suitable for reporting on budgets that will be invoiced over a period of several months however.
1. Setup Cost Matrix
First, make sure all cost rates in the cost matrix are set to 0.
a. Set Cost Rate per Staff Member
Ensuring that each staff member has a specific cost setup will mean that when time is added to the job cost rates will be applied to that time - which will lead to clearer reporting.
2. Create Quote
When creating quotes, all line items will have quote rates/totals applied as setup from the relevant cost matrix tier however the cost rates will remain 0.
3. Third Party work
Any third party work is inserted in the quote WITH it's expected cost
- Some will follow the standard workflow and drop related order lines down in the quote (like the printing in this quote)
- Others cut a corner and insert prices straight in the quote (like the photography in this quote)
Either way it will work
4. Expected Cost and Gross Profit
So now the expected cost of the quote only includes the third party cost. Therefore, the expected gross margin displayed on the quote screen actually becomes the expected gross profit.
5. Quote Status
You can then create different quote statuses to indicate what month you expect that budget to get approved.
The months can just rotate each year and as a quote status, they are very quick and easy to change to the next month. The status selected means the quote is on approval and it's profit is projected in April
The same goes for accepted quotes - they get a status that starts with ACC to indicate they're accepted.
NOTE: if you project accepted quotes in a specific month, you must remember to change the quote status to a generic 'accepted' once the job is finished. Otherwise they will show up in your forecast again next year. Alternatively, you could leave them as they are and distinguish by using the active flag. ACC APR - Inactive could mean April last year, whereas ACC APR - Active would mean April this year. This is all very quickly controlled from different windows in the application.
a. Relative Statuses
Alternatively you could also use 0, 1, 2, 3, as the quote status. These could be used to indicate the number of months expected before the money is received. 0 being this month, 1 is next month, 2 is in 2 months and so on.
The advantage of this is that it is a relative status, even after the month ticks over. So next month (1) will always be next month, unless you change it to "won", "lost" or move it to this month (0)
6. Searching Quotes
All statuses beginning with APP or ACC still allows me to search all accepted quotes or all quotes on approval by typing it manually in the advanced search.
So now I can search for all quotes projected for April by searching the quotes list for APR in the advanced search.
The quote list nicely shows you the Quote total, Gross Profit and %GP per quote. If the %GP is 100% it means you're not outsourcing any of the work.
8. Get Totals
Press Get Totals to see the total projected revenue and gross profit for April.