Some agencies deal with a large number of 3rd party expenses. Or sometimes there aren't many, but the few expenses that get booked are very large. If an agency has a $125,000 turnover for June 2023, but included in that amount is one exceptional project, where we purchased and sold the the printing of books, worth $47,000, then the turnover itself isn't very meaningful. For such agencies, the revenue – direct third party costs (i.e. 125k - 47k = $78k) is the more meaningful metric. In wayahead this metric is called contribution.
Contribution = Revenue – cost of 3rd party expenses
While we can easily work out the contribution on a job level in Streamtime, by subtracting cost of all expenses from the invoice total (manually – cause there is no column to show this on screen), it is NOT possible to work out contribution per month, per year or on an invoice level.
Even though both the invoice and the expense are linked to the same job, there is no information in Streamtime that says which expense was billed out on what invoice.
In certain cases, such as the cost of printing the book, they will be easy to trace. The sell value of the printing will most likely be listed directly in the invoice with the same description and sell rate as in purchase order record.
But in a lot of other cases, that's not the case. Think of the cost of a freelancer developer who bills you a couple of days work to help out your development team on large digital project that lasted 6 months? You might not want to tell your client you had to get help cause you didn't have the knowhow or the time to do it on your own. In the outgoing invoice, that freelancers cost will be 'hidden' in the invoice lines for development and the price nor the description will match what you wrote in the expense record.
wayahead's Invoice Contribution report is a tool that allows you to build the missing connection between expenses and invoice. It lets you confirm which order/expense was billed out on each invoice, so that for each invoice we know exact what the corresponding cost is. And once we have that, we can summarise contribution by month, by year, by client, by job type, by account manager and any other metric.
Agencies who are focussed on contribution will use the Invoice Contribution report every week or every month to confirm contribution.
wayahead stores 2 pieces of information for this report to work:
Which (%) of each expense is related to what invoice? Obviously, we only ever want to connect the dots once. Later we need wayahead to remember the associations we created.
What is the total cost and contribution against the entire invoice (Reports that rely on the contribution will not fetch expenses and read associations, instead they will use final totals stored for each invoice, which is much faster)
Where is contribution used?
The contribution is used in the following reports:
Invoice Contribution
Invoices
Annual Revenue
Choose Period
When you open the Invoice Contribution report, you start by picking a date range using the date picker at the top right of the page. You can pick one of the predefined periods OR pick your own custom range. wayahead fetches all invoices as soon as you click APPLY.
Invoice List
wayahead will list all invoices issued in the selected period. For each invoice you see the job name and client name and the invoice number. Each has an arrow link to click through to the corresponding record in Streamtime.
Next you can see the Sell value of the invoice, the (guesstimated) cost and the (guesstimated) contribution.
The status column shows one of the following options:
Number: a red label with a number inside, like in the example above, means there are 3 expenses related to the job that have not yet been assigned to an invoice.
Store: this means there are no (more) expenses to associate. When you click Store, wayahead stores the revenue, cost and contribution in the local database for future reporting.
(If NO expenses are associated with the job, we just click Store to save $0 cost and 100% contribution. But it could also be that we haven't entered all expenses yet – hence storing isn't automatic)Stored: This means the revenue, cost and contribution have been stored in wayahead and are ready for reporting.
As soon as you make a change to the associated records, the button will change back to a yellow "Store" button and the stored totals can be overwritten.
You can do a quick search through the list or filter the list by account manager, using the filter at the top of the page.
Association expenses with invoices
When you first runt he report, you'll notice that certain invoices have pre-populated cost figures associated with them. That is because wayahead makes an estimated guess of which expenses are likely associated with each invoice. More about that later.
Simply click an invoice line to bring up the modal with the invoice details (screenshot below). This modal shows 4 main areas:
The invoice header (client, job, invoice number, status, date and due date)
The invoice lines
The invoice totals
The related purchase orders and expenses
For each expense/order, click No, Yes or % to indicate whether this expense has been invoiced out to the client on this invoice. When you choose YES, you'll see that the cost of that expense/order is added to the 3rd party cost of the invoice and the contribution goes down.
Choose % and fill out a number >0 and <100% if the expense was partially billed out on the selected invoice.
When you are finished, click "Confirm" on each individual expense/order.
When all expenses/orders are confirmed, you'll see the status of the invoice change in the main list. In the example below, there would have been a red label saying there are 3 related expenses/orders. After confirming each one, the status changes to "Store" for you to confirm all data is ready.
Summaries and graphs
Press the toggles at the top left corner of the page to change the view mode from invoice list to graph/summary mode.
You can see a summary per montha and per client, as well as a list of revenue and a list of contribution per client, sorted by their volume.
