Understanding Profitability

Learning Team

Overview

Revenue tracking and entering billing records are key areas of focus for many Practifi firms. To make this process more seamless and straightforward, users can use the Profitability section in a Client's entity record. This feature includes additional tabs that cover three kinds of profitability measurement: the cost of time across clients, overall asset revenue, and historical installment records, giving teams a clearer picture of where each client relationship stands.

Profitability Analysis
Activating the Profitability Section
Defining Profitability
Reporting on Client Profitability

Profitability Analysis

Tracking servicing costs using Tasks and Events has been a long-standing feature in Practifi. Still, with the enhanced historical revenue tracking and revenue projection capabilities in our Barolo release, it's now possible to identify precisely who your most and least profitable clients are, clarifying where your team's time delivers the greatest return.

We've included some enhancements to bring these disparate data points closer together:

A dedicated section on Client record pages includes each set of profitability inputs as its own tab, meaning you can quickly switch between them.
A report that takes full advantage of Salesforce's powerful Report Builder to bring costs, historical revenue, and projected revenue across your client book into a single chart or table.

Activating the Profitability Section

A Practifi Administrator will need to add the Additional Features - Profitability permission set to your firm's various permission set groups. Users in these groups will begin to see Profitability appear as a section in the navigation panel on Client record pages.

To add the Additional Features - Profitability permission set, the administrator will need to do the following:

Navigate to the Salesforce Setup page by clicking the gear icon in the upper right-hand corner of the page and selecting Setup.
Use the Quick Find search to search for and select the Permission Set Groups option within the Users menu.
Choose the specific Permission Set Group you would like to be able to view the Profitability menu, and then click the Permission Sets in Group hyperlink provided on the new page.
Click the Add the Permission Set button.
Check the box for Practifi - Additional Features - Profitability, then click the Add button.
Finally, click the Done button.

Please note: Once the permission set has been added, users may need to log out and back into their Practifi instance to see the new Profitability section.

This process will need to be repeated for every group that you would like to have access to this menu item.

Defining Profitability

To help teams define profitability in different ways, Practifi now offers more flexibility for organizations to review metrics in the Profitability menu. The section consists of three tabs:

The Time & Cost tab displays a list of all the client's Tasks and Events in reverse-chronological order, including Time Logged (minutes) and Cost as list columns.
The Asset Revenue tab displays a list of all the client's active Assets related to Services and that contain Annual Revenue information.
The Installments tab displays a list of all the billing records related to the client, one of their Services, or one of their Assets. This section only appears if you've enabled the Installments feature for your users. To learn more about Installments, please review our Understanding Installments article.

Reporting on Client Profitability

Salesforce's reports and dashboards give you serious power and flexibility to create your own analytics solution for profitability analysis. To help get you up and running, we've created a sample report that uses the joined reports feature to bring all the disparate elements of profitability analysis into a single location.

The report, named Profit by Advisor & Segment Last 12 Months, displays several measures grouped by Client Name, Client Segment, and Advisor:

The Time Logged and Cost for all Tasks & Events created during the last 12-month period.
The total value of Installments created during the 12 months and the resulting Gross Profit (Installment Value minus Cost) and Gross Margin (Gross Profit divided by Installment Value, as a percentage).
The total Annual Revenue of active Assets projects the most recent revenue inputs across 12 months, providing a like-for-like comparison with the historical Cost and Installment values used by the report. Annual Revenue is used to calculate Projected Profit (Annual Revenue minus Cost) and Projected Margin (Projected Profit divided by Annual Revenue, as a percentage).