Calculation Options for Annual Revenue

Overview

Revenue information typically becomes less relevant the older it is, so projecting revenue based on the most valuable inputs your firm has available can often be preferable to historical analysis. To ensure your firm has an accurate set of revenue projections to work with, we've enabled multiple calculation options for the Annual Revenue fields on Assets and Services.

• Expanded Calculation Options for Annual Revenue
• Considerations and Questions
  • How Do I Choose Which Calculation Method My Firm Should Use?
  • How Do I Set the Default Calculation Method?
  • How Do I Set the Multiplier if I Need It?
  • How Do I Add Annual Revenue Fields to the Page Layout?

Expanded Calculation Options for Annual Revenue

The following calculation methods are available on Assets and Services:

Calculation Method	Asset field	Service field
Service based on Service Fees & AUM, Asset-based on the percentage share	A percentage of the Service's Annual Revenue that's equivalent to the Asset Value as a percentage of the Service AUM, e.g.: If a Service has an AUM of $5M and an AR of $5k, then an Asset in that Service with a Current Value of $1M would have an AR of $1k, 20% of the overall Service value.	Using the AUM value captured on the Service record, apply the fee structure defined in the Service Type. Takes the AUM for the record and applies the Service Fees structure to it, as we do today both for itself and for Deals.
Asset-based on Last Installment & Multiplier, Service based on Asset rollup	Takes the Installment record related to it, which has the most recent Installment Date, and multiplies its Final Value by the number stored in the Annual Revenue Multiplier custom setting.	The sum of Annual Revenue from all related Assets marked as Under Advice.
Asset sourced via integration, Service based on Asset rollup	The field value is not calculated automatically. Instead, it's provided separately by a bespoke integration, which populates the field directly.	The sum of Annual Revenue from all related Assets marked as Under Advice.

Considerations and Questions

How Do I Choose Which Calculation Method My Firm Should Use?

There are some easy guidelines to follow when making your choice of calculation method:

• When using an integration that populates the Annual Revenue field on Assets directly, use Asset sourced via integration, Service based on Asset rollup.
• Otherwise, if you're actively tracking Installments, use Asset based on Last Installment & Multiplier, Service based on Asset rollup.
• Otherwise, if you've set up your Service Types with Fees, use Service based on Service Fees & AUM, Asset-based on percentage share.

If none of these settings apply to your firm just yet, consider setting up 📚Service Fees. It's less accurate than the other two options; however, it's easy to get started without any integrations or data capture to worry about. 

How Do I Change the Annual Revenue Calculation Method?

You can change the method for annual revenue calculation for your Practifi organization in Setup. To change the calculation basis for annual revenue:

1. From Salesforce Setup, use the Quick Find field to search for Custom Metadata Types.
2. On the Custom Metadata Types page, click the Manage Records link next to Practifi Feature Settings.
3. On the Practifi Feature Settings page, click the Edit link.
4. In the Practifi Feature Settings Edit area, click the Annual Revenue Calculation Basis picklist and select the desired option.
   
5. Click Save.

Please note: If you do not see the Annual Revenue Calculation Basis picklist on this screen, see the How do I Add Annual Revenue Fields to the Page Layout? section below.

How Do I Set the Multiplier if I Need It?

The multiplier value is configured from the same location as the calculation basis above in the Annual Revenue Multiplier field. Set this value based on the time period that a typical Installment record encapsulates, e.g., if your firm's Installments are typically captured on a monthly basis, then set the multiplier value to 12.

How do I Add Annual Revenue Fields to the Page Layout?

If you do not see Annual Revenue Calculation Basis and Annual Revenue Multiplier options on the Practifi Feature Settings Edit screen, you can add these fields to the page layout:

1. From Salesforce Setup, use the Quick Find field to search for Custom Metadata Types.
2. On the Custom Metadata Types page, click the Practifi Feature Settings link.
3. In the Page Layouts area, click Edit.
4. In the Practifi Feature Settings Layout area, drag and drop the Annual Revenue Calculation Basis and Annual Revenue Multiplier fields into the Information area below.
   
5. At the top of the screen, click Save.