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Profitability Analysis Solution for Professional Services Firms
- Quickly identify revenue gain/loss trends
- Improve business planning and recognize opportunities for greater profits
- Review critical performance data by client/matter, department, practice group and timekeeper
Elite Profitability Analysis Report provides comprehensive, at-a-glance financial reports that analyze and reveal where your firm is achieving the best results over a selected time period. This solution is designed to create management reports that provide multiple ways to analyze efficiency and profitability, including by client/matter, type of law, practice group, department and any other matter-related field. And the easy-to-use, parameter driven setup and sort features get you up and running quickly.
Without Profitability Analysis Report, you won’t have a true picture of your firm’s profitability.
Profitability Report Definitions
- Hours Billed and Time Charges/Billing Value - Reflects hours relieved by billings, including zero billings and write-offs at standard inventory value of hours billed.
- Direct Costs - Compensation and benefit costs of non-partner timekeepers.
- Indirect Costs - Allocation of firm overhead to all timekeepers based on timekeeper class.
- Disbursements and Other Expenses - Reflects out-ofpocket expenses incurred on behalf of the client such as travel, filing fees, court reporters and costs incurred on behalf of the client that are more integrated with on-going firm operating costs, such as photocopying and telephone.
- Realization Adjustments - The difference between actual billing value and standard inventory billing value, plus work-in-process (WIP) and accounts receivable write-offs and adjustments.
- Carrying Costs - Simple interest on all WIP and receivables (percentage amount determined by your firm).
- Contribution Per Partner Hour - Contribution to profit for each hour of partner time spent on this type of work.
- Contribution Per F. T. E. Partner - Contribution to the profit of the firm if an average partner, from the specified office, worked full time on this type of work.
- Leverage: Non-Partners to Partners - Ratio of nonpartner attorney hours billed to partner hours billed.
- Leverage: Timekeepers to Partners - Ratio of all nonpartner timekeeper hours billed to partner hours billed.
- Average Billing Rate Per Partner or Non-Partner Hour - Standard inventory value of partners or non-partners hours divided by the number of partner or associate hours billed.
- Realization Adjustments as a percentage of Billing Value - Rate adjustments, WIP adjustments, WIP write-offs and A/R write-offs as a percent of the standard inventory value of hours and disbursements billed.
- Carrying Costs as a Percentage of Billing Value - WIP and accounts receivable carrying costs (at percentage amount determined by your firm) as a percent of the standard inventory value of hours and disbursements billed.
Simplify Decision-Making with Powerful Analysis Features
- Gross and net totals for billing values and contribution show profitability
at-a-glance.
- Detail of hours and billing value for all staff functions, including partners,
associates, specialists, legal assistants, analysts and law clerks.
- Realization adjustments for all work in process give a true picture of
where firm profitability stands at any point in time.
- Key statistics on leverage (partners and non-partners) and average billing rates, as well as percentage of realization adjustment and carrying cost.
- Compare several time periods to help in decision-making and future planning.
- Multi-time keeper allows firms to allocate client income to a specific partner or non-partner. Profits can also be divided on a percentage basis, by client/by partner or non-partner.
- Receivables are calculated based on the percentage of payments. This feature tracks a realistic percentage of income that can be collected and allows for a future reserve calculation.
Report Sample: Review Profitability by Contribution,
Adjustments and Net Totals
- The first section displays what the profitability (contribution) could be if all time recorded was billed at standard (optimum) rates less direct and indirect costs.
- The second section shows all expenses incurred on a client’s behalf.
- Next, the report displays all adjustments, discounts and write-offs as well as carrying costs.
- The fourth section shows the actual contribution after all discounts and write-offs are taken into consideration.
Consult the Experts
Thomson Elite has a dedicated team of consulting experts that focuses on helping professional services firms better understand their business processes, identify efficiency gains, recognize strategic opportunities and implement business process
automation solutions.
Your Partner for Success
Thomson Elite is a leading provider of integrated information solutions to professional service firms worldwide. Thomson Elite is a business within The Thomson Corporation (NYSE: TOC; TSX: TOC) and is a premier provider of financial and practice management systems to the legal industry and to other professional service markets, including accounting, engineering, marketing services, and management and IT consulting.
Contact Thomson Elite to put the power of Elite Profitability Analysis Report to work in your firm today. Please complete this sales request form or call us at (323) 642-5200.
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