⚠️Please note: This report works best when directly billing out of Financial Cents.
Tracking your effective hourly rate helps you identify which clients are killing your firm's profitability. This report is essential for firms that bill their clients on a fixed-fee model and will help you identify your least and most profitable clients.
To see the Effective Hourly Rate report in action, view the video below:
The effective hourly rate for all clients can be found by navigating to Reports > Effective Hourly Rate. The effective hourly rate for a specific client is available directly on the client profile under the Activity tab like shown below.
Lastly, Owners can control which roles on the account (e.g. Admin, Member, or Contractor) can view the Effective Hourly Rate values by modifying the settings under Invite Team > User Permissions. By default, only Owners have access.
Effective Hourly Rate Calculations
For each column in the Effective Hourly Rate report, we use the data from the selected time frame. For example, if the selected date filter is for Feb 1st - Feb 28th, then the value shown for "Amount Billed", "Time Tracked", etc. will only be those that occurred during Feb 1st - Feb 28th.
Column Header | Definition/Calculation |
Amount Billed | Calculated from the amount invoiced to the client from Financial Cents during the selected date range, regardless of the invoice being paid or not |
Time Tracked | Based on how much time your team tracks for the selected client using the time tracker in Financial Cents |
Effective Hourly Rate | The value for "Amount Billed" divided by the value for "Time Tracked" |
Labor Cost | Calculated by summing up the labor cost per employee, found by multiplying the value for "Labor Cost" set on the Team Members page by the amount tracked by that team member ⚠️ Please note: Labor cost is only available on the "Scale Plan" |
Gross Profit | Calculated by subtracting the value of "Labor Cost" from "Amount Billed" |
Margin | Calculated by dividing the value for "Gross Profit" by "Amount Billed" |