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Matt McCauley

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Make Smarter Decisions with the Informer 5 Business Intelligence Tool

Posted by Matt McCauley on Wed, Apr 11, 2018 @ 11:35 AM

Informer 5Business analytics has become increasingly important for professional services firms. However, finding a business intelligence (BI) tool that works with Deltek Vision and gives us the analytics we want has been challenging. We need flexibility, customization and ease of use to answer important questions about our firms yet often we find that this type of analysis is not accessible in Vision. Thus, we are faced with the export/import/number crunch process in an external tool like Excel plus countless hours spent doing the calculations over and over. We need a better solution, instant access, and easy updates.

Enter Informer 5

Introducing Informer 5, the BI tool which works with Deltek Vision to make instant analytics readily available. Informer 5 is an integrated customizable interface to Vision data for use in various analytical scenarios. Using the Blackbox Connector, direct integration with Vision is now a reality.  

You simply select the data fields you want in your database including standard Vision fields, User Defined Fields, and User Defined Info Centers, and you’ll quickly be able to visually see project metrics, employee measurements, marketing results, and firm forecasting. You’ll be able to answer questions such as: 

  • How are my projects performing?
  • How is that new branch office doing?
  • Are my employees billing enough hours?
  • How is the firm doing compared to the last three years?

Also, remember those spreadsheets with all that data we built over the past years? Informer 5 can integrate this data with your Vision data. No need to reinvent the wheel, we can use it as a data source. Other data sources? Informer 5 can access those too.

Visualize Your Data with Informer 5

Are you interested in where your work is being done and where the profits are made? Well, Informer 5 also includes geographical presentations including maps. You can easily visualize and determine these specifics with Informer 5.

You can even find the numbers behind the pictures. Informer 5 has built in drill down capabilities that can take you directly to the detail data. From Profit Center to Project Manager, Project Manager to Project, and all the way down to line item detail, data can be acquired with Informer 5, and all of this can be gathered from the same graph with no need to run additional reports.

Make Smarter Decisions with Informer 5

On a final note, the Informer 5 package includes set calculations for many of our industry standard metrics. Additional calculations can be added to customize this solution for any firm. Also, firm data can be updated regularly on schedule or updated on demand from Vision. It is up to you. So, with all of these awesome features of Informer 5 and its integration with Vision, isn’t it time for your firm to start making smarter decisions?

Blackbox Connector for Informer 5 and Deltek Vision

Topics: Technology Solutions, Professional Services, Building Business

Revenue Generation Methods

Posted by Matt McCauley on Wed, Nov 01, 2017 @ 01:17 PM

Revenue Generation In a previous article, we discussed the challenges with Revenue Method “B.”  In this article, we will look at several different approaches to revenue generation and how these can affect our revenue accruals. Can these methods get us closer to FASB 606 compliance?

Work in Progress Method

Work in progress (WIP) method adds unbilled items to the revenue formula. Unbilled items include labor, reimbursable expenses, and reimbursable consultants. The standard formula only includes items marked as “to be billed.” Items marked as “hold,” “write off,” or “delete” are excluded.

This method is a good candidate for unlimited time and materials projects that are not billed regularly. The WIP amount is easily tracked on the unbilled report and shows as the unbilled variable on some project reports. The WIP method is a standard Vision option.

The main disadvantages to this method are:

  • This method includes billings and is subject to the issues related to using billings
  • This formula has no limit and could lead to revenue overruns
  • This may not comply with FASB 606 since it may not correctly measure revenue

Percent Complete Method

Percent complete method requires project compensation values and percent complete values. For best accuracy, these values should be managed at the lowest level of the work breakdown structure (WBS).

Percent complete is calculated in one of two ways:

  1. Percent complete x by total compensation
  2. (Percent complete x by labor compensation) + job to date direct consultants at billing + job to date reimbursable consultants at billing + reimbursable expenses billed

These methods can produce more accurate revenue, and the biggest advantage is these methods do not use billing amounts in the formula. 

The challenge with this method is obtaining accurate percent complete numbers. This requires estimates of completion which can pose a challenge. Especially if we need this measurement for multiple WBS on a project. The percent complete method is a standard Deltek Vision option.

Earned Value Method

Earned value method uses a percent complete strategy but can calculate revenue via the formula. There are several strategies that can be used to calculate the percent complete:

  • Using Project Summary Tables - calculate the percent complete based on job to date spent which requires the use of workflows to calculate the values and user defined fields to display the amounts in the Project Info Center
  • Using Project Budgets - calculate the percent complete based on budget amount expended which can require user intervention
  • Using Project Planning Module - calculate percent complete based on estimate to complete and estimation at completion values calculated in the planning module which requires the planning module and regular updates of project plans

Time and Materials Method

Time and materials method is based on transactional inputs to the project. Revenue is earned as expenses are incurred. As a result, this is a simple and straightforward method.

This method is easy to deploy and needs no manual intervention. The formula needs to be adjusted based on what transactions we want to include in revenue such as direct expenses.

Subject to Max

The subject to max variable can be added to a formula to put a “cap” on revenue. Subject to max uses total compensation (labor + consultants + expenses) from the Project Info Center in Deltek Vision.

If you need to cap individual amounts (labor, consultant), we need to create a separate revenue method for that individual limit (labor compensation, consultant compensation, etc.) and combine these methods into a “lesser than” formula to give us the lesser of earnings or compensation.  

Lesser Than/Greater Than

With these variables, we can compare two formulas and take the higher or lower amount, depending on how we want to calculate the revenue. For example, we want to take the lower of job to date billings or percent complete, or we want to take the lower of total labor spent or labor compensation. The formula will return the lowest amount as revenue.

The Matching Principal

Remember the matching principal. With any revenue method we use, we want to get the best match between calculated revenues and the associated expenses. In several formulas, we are matching labor revenue with actual labor spent, or (better) the actual earned value attained by those labor costs.

For expenses, the objective is to have a -0- effect on net revenue. Revenue is earned as expense is incurred. In this scenario, the accounts payable transaction triggers revenue. When the expense is incurred, revenue is generated. This results in -0- net revenue. Why is this important? Because now we can measure the true effectiveness of our labor.

Measuring Project Performance with Revenue Generation  

Revenue generation is a key component to measuring project performance. There are many revenue formulas we can use to accrue revenue to our projects, and there is no “one size fits all” method that will work perfectly for every firm or project. Users should develop and test methods to determine which method(s) fit best for them. Many firms use multiple methods tailored to specific projects.

The bottom line is that revenue must accurately measure earnings to be in compliance with GAAP and FASB 606. Revenue and expenses must accurately be matched to provide the best measurement of project performance.

 Revenue Generation

Topics: Professional Services, Accounting, Project Management

Is This the End of Deltek Vision’s Revenue Method B?

Posted by Matt McCauley on Wed, May 24, 2017 @ 11:00 AM

Revenue Method B-1.pngRevenue Method B is the most widely used revenue method in Deltek Vision. In fairness, this is Vision’s default method for projects whose charge type is Regular. As a result, most firms use it since it’s easy to deploy and seems to work, or so we think.

How Revenue Method B Works

Revenue Method B works well when we have a time & materials project that is billed frequently. In this scenario, we have a perfect match between revenue and costs and can easily measure project performance. On the other hand, when billings and costs don’t align, measuring interim project performance becomes more challenging. Milestone billings or fixed fee projects are billed on cycles that don’t always coincide with a proper revenue accrual or as the associated costs are incurred on the project. Keep in mind that we are not matching revenues and expenses, and this can lead to unreliable financial results during the project life cycle.

For example, a project has a contract provision that calls for $10,000 to be billed at the end of month two. We complete the work in month one at a cost of $3,000 (10,000 billing rate). The financial reconciliation for this project is:

Revenue Method B Table

In month one, the project has no income (no billings) and incurs costs of $3,000. With Revenue Method B, the project incurs a $3,000 gross margin loss.

In month two, when the project is billed, we have the reverse situation; $10,000 Revenue and no cost, which results in a $10,000 Gross Margin profit.

So…did we make money or not?

The Results of Using Revenue Method B

From month to month, it is very difficult to assess the true profitability of the project. Therefore, we must wait until a point where billings and costs align or the project is closed. In this simple example, we can look at the end of month 2 and determine our performance. However, what if this project spans over a year or more? With Revenue Method B, we may never have a point where revenue and costs align to make an informed decision on profitability.

To accurately measure performance, a proper matching of revenue and costs is mandatory. Revenue must be earned as work is completed or as the associated costs are incurred. This is the best accounting practice, and with the impending requirement of FASB 606, will now be part of Generally Accepted Accounting Principles (GAAP).

Clearly, Revenue Method B will not work well when the earnings process does not align with the billing process. For those of us using this method, we are reporting inaccurate results to our stakeholders or making manual adjustments to accommodate for Revenue Method B’s shortcomings. Fortunately, Deltek Vision offers alternatives that will help us properly record revenue and comply with FASB 606.

FASB 606 Implications

In May 2014, FASB 606 was released and will be required by December 2018. FASB 606 will render Revenue Method B obsolete for most projects.

FASB 606 has five elements:

  • Identify the contract with the client
  • Identify the performance obligations in the contract
  • Determine the transaction price
  • Allocate the transaction price to each performance obligation
  • Recognize Revenue as we satisfy the performance obligations

FASB 606 does not reference billings unless billings specifically follow the earnings process described above. Therefore, to be in compliance with this new requirement, we must abandon Revenue Method B for most of our projects.

Revenue Method B Alternatives in Deltek Vision

Stay tuned for the next chapter…User Defined Revenue Methods. We will look at how we can use Deltek Vision to create Revenue Methods that will comply with FASB 606. In the meantime, click here to learn more about FASB 606. 

AE Firm

Topics: Accounting, Deltek Vision

The Unknown Features of Timesheets in Deltek Vision

Posted by Matt McCauley on Wed, Mar 22, 2017 @ 02:30 PM

Timesheets It is a mystery why we deal with time management so badly. This is our commodity which we sell to our clients. However, we treat it like a curse, as if it’s an evil process that accounting forces on us. It somehow escapes us that this is the lifeblood of our business, and without it, we are out of business. So why don’t we manage this better and how can we improve our firm’s practices? 

Well, to begin with, the timesheet function in Deltek Vision is incredibly easy to use. You just need to know what features to focus on. Let’s take a look at timesheets and what is offered in Deltek Vision regarding time management.

Timesheet Best Practices

Project management best practices always include sound timesheet management processes. First of all, timesheets should be entered daily and submitted timely. Secondly, project manager review is mandatory. Timesheets should be corrected before they are posted to our projects and the billing system in Deltek Vision.

Poor timesheet management inherently leads to inefficient processes later. Timesheet miscodes cause incorrect project reporting and erroneous invoices. Additionally, transferring time entries in the billing system is time consuming. This slows down billing, involves the project manager, employee and accounting. Worst of all, this directly affects cash flow because of the delay in processing client invoices.

Features of Timesheets in Deltek Vision

We need sound, efficient and thorough timesheet management policies and procedures. They need to be incorporated into our culture. Along with daily entry and strict deadlines for timesheet submission, Deltek Vision has a number of tools to assist project managers with this process:

Floor Check was introduced in Version 7.2 and is a powerful tool that lets timesheet administrators see if employees are doing their timesheets. It shows the employee’s expected hours and the actual hours entered. Additionally, floor check has email functionality, so you can email employees directly and tell them, “DO YOUR TIMESHEET,” or you can also create pre-defined messages.

Unposted Labor Report is a standard project report that only shows unposted time sheets. This is the ideal tool for project managers to use in order to see what has been charged to their projects before they are posted. This is the perfect opportunity to fix timesheets before they are charged to our projects.

Project Reports with Unposted Time reports can be included in project reports by using the unposted time option. As a result, project managers can see labor being charged to their projects during the timesheet period.

Line Item Approval allows project managers to use line item approvals to put their final approval on time charged to their projects once timesheets are submitted. Line item approvals link to project ownership, so project managers will only see their projects.

Timesheet Audit Trail tracks changes to timesheets after they have been saved or submitted. You can require the employee enter a comment, or just track changes without explanation. Audit trails can also track billing transfers. This is the “where did it go” and “where did it come from” report. A timesheet audit trail report is available in employee reporting.

Get Your Timesheets Done!

With all of these tools within Deltek Vision at your disposal, timesheet management is within your grasp. You can simply start with daily timesheet reminders. Eventually, you will develop a plan that makes timesheet management best practices part of your firm’s culture. 

The Future of Vision

 

Topics: Deltek Vision, Accounting, Project Management

Better Manage Your Professional Services Firm’s Margins with Deltek Vision

Posted by Matt McCauley on Thu, Dec 15, 2016 @ 03:08 PM

Manage Profit Margins

One area that challenges professional services firms is managing margins. As a result, the profits from a particular engagement or project fall short the projected amount. However, you’re not alone. In a recent study by Consulting Magazine, 80% of professional services firms indicated that they struggle with managing and protecting margins. For Deltek Vision users, this does not have to be the case.

The Challenges with Managing Profit Margins

There are four main reasons professional services firms struggle with managing margins: over-servicing, scope creep, unrecorded and lost time, and changes in client fee structures. Firms should be able to maintain control over these things with the exception of changes in fee structures. So what’s the problem here?

The long and short of it comes down to cumbersome processes and tasks, and disjoined systems limit visibility and insight into real-time critical project data. Additionally, let’s not forget about the time required to enter the same information into multiple systems. This time is now lost when it could be used for more beneficial purposes such as, keeping up with tracking time and expenses.

Increase Profit Margins with Deltek Vision

Successful businesses need to make informed decisions quickly. With Deltek Vision, critical project data are in one accessible place. Therefore, executives can review the health of the firm, identify areas of weakness and develop plans to change the direction of the business. At the same time, accounting and project managers have insight into real-time project data, which allows them to manage their projects effectively and eliminate surprises.

Deltek Vision has several helpful features which ensure project managers are able to protect profit margins. With Vision, accountants and project managers have access to mission critical data which allows them to:

  • Compare budgets to actual
  • Compare costs versus billing
  • Identify outstanding invoices

Furthermore, projects which are built in Vision are based on actual people and actual hours using the Vision Planning Module. In addition, time tracking and expenses are part of the core system and are easily associated with a specific project so project managers are able to keep a close eye on project performance.

Visualize Project Performance with Deltek Vision

Numbers are definitely necessary in managing projects, but they don’t reveal critical project data like a colorful chart or graph will. Using Vision Performance Management (VPM), executives, project managers and accounting all have the ability to clearly visualize project performance quickly in a user friendly dashboard. This allows users to identify problems at a glance before taking a deep dive into the means for overcoming them. Think about VPM as visual performance management. To learn more about VPM, check out this article.

Take Control of Managing Profit Margins

In the end, firms using Deltek Vision don’t have to struggle with managing profit margins. Foremost, all professional services firms must keep a close eye on their projects using the features provided by Deltek Vision. Additionally, firms can then add the convenience of visual performance management to their toolbox with VPM. Let Deltek Vision help your firm take back control!

Deltek Vision Performance Management

 

Topics: Technology Solutions, Accounting

Get More from the Deltek AE Clarity Report with Vision Performance Management

Posted by Matt McCauley on Wed, Oct 19, 2016 @ 11:00 AM

Firm PerformanceKnowing how your AE firm compares to your peers is critical for evaluating the health of your business. Fortunately, regularly monitoring your firm’s performance doesn’t have to be a challenge for Deltek Vision users. In this article, we’ll take a quick look at the background of the AE Clarity study and introduce the Vision Performance Management (VPM) interactive dashboard.

What is the Deltek AE Clarity Study?

Each year, Deltek works in conjunction with the American Counsel of Engineering Companies (ACEC), ACEC Canada and the Society for Marketing Professional Services (SMPS) to gather and benchmark key performance metrics for the AE industry. The study draws from over 250,000 data points provided by 386 US and Canadian AE firms of every shape and size.

As the oldest and longest running study of its kind, Deltek AE Clarity report is the authoritative industry standard and the 37th annual Deltek AE Clarity Study is out and available for download. This report is a comprehensive summary of performance results for 2015.  Additionally, these results include several key statistics that are easy to calculate and monitor, plus allows you to compare your firm’s performance against your industry peers.

How Can Your AE Firm Use the Results?

Having measurable insight into the key performance metrics of your firm plays a vital role in strategic planning and decision-making. The Clarity report shows a number of measurements, and all are important items to track. However, every firm should track several key measures regularly such as:

  • Operating Net Profit on Net Revenue
  • Utilization Rate
  • Net Labor Multiplier
  • Total Payroll Multiplier
  • Overhead Rate
  • Net Revenue per Employee

Some of these statistics can be calculated in Vision, but they are not encapsulated into one comprehensive report without extracting individual measurements into a summary table like Excel. However, the spreadsheet will need to be a manual update for ultimate presentation to firm stakeholders. Surely, there’s got to be an easier way, right?

Introducing Deltek Vision Performance Management

With Deltek VPM, these statistics incorporate easily into an interactive Vision Dashboard. As a result, executives can simply view these vital statistics on the screen and use built in filters to “slice and dice” the numbers as shown below.

Vision Performance Management Clarity Metrics

But wait, there’s more! With VPM, you also have interactive graphs to monitor performance. These graphs allow users to transform rows and columns into bars and colors. VPM will also enable users to see performance using visual metrics. In other words, Vision Performance Management is more like Visual Performance Management as demonstrated below.

Vision Performance Management Utilization Screen

Start Monitoring Your AE Firm

Staying ahead of the competition requires knowing where your firm matches up in terms of these key performance indicators. Luckily, VPM allows Vision users to see where their firm stands on a regular basis.

Deltek Vision Performance Management

Topics: Deltek Vision, Professional Services, Building Business