Can I use the margin reporting for forecasting?

Yes, the report can provide you with a prediction for your margin over the next 12 months.

For information about predicted margin to become available, you must ensure that contracted hours or rotations have been set up for your placements. Where applicable, exchange rates must also exist between the charge and pay currencies and the base currency. To set up contracted hours for your placements, you can use the Edit Placement screen.

Note:

If a worker is on a fixed or daily rate, then you must ensure that the figure that's in the Contracted Hours Per Week field (on the Edit Placement screen) is consistent with the figure that's in the Duration (minutes) field for the rate. For example, if the Duration field contains the value 480 (indicating that the worker is contracted to work 8 hours in a day), then, for a 5-day week, the value in the Contracted Hours Per Week field should be 40. Note that the forecast cannot take into account bank holidays and sickness. It assumes that workers are working their contracted hours for the whole period that you select.
If a placement's End Date is the same as the Start Date it is treated as a one-off charge placement, and the rate is multiplied by one.

To view predicted margin

On the menu bar, select Reports > Margin Report.
The Margin Report page is displayed.
On the Grouping tab:
1. Select one more groupings in the Group By list.
2. Select Show Charge By Month. This means that the data will be grouped into a monthly block, according to the groupings that you selected in the Group By list.
3. Select Include Forecast.
Click Gross Margin.
The margin report appears, showing predicted margin:

The report is a simplified margin report; all you get is the total invoice margin figure.

All the information up to the current time is real, actual invoice data. Information for future months is predicted data. Predicted margin indicates what you would expect to pay and charge for a timesheet, based on the default rate for a placement, and the contracted hours for that placement.

Margin is calculated on the last day of each timesheet period and this date determines which month the margin is included in. For example: The full margin for a timesheet ending on the 2nd January will be included in January even though there are 5 days in December. This applies whether a rotation is present or not.

How is predicted margin calculated?

Predicted margins are calculated as follows:

ActiveWeeks = the number of days the placement overlaps the timesheet period / 7
Units = (ContractedHours x ActiveWeeks) / (Duration of default rate / 60)
Predicted Pay = Units x Pay in Base (from default rate)
Predicted Charge = Units x Charge in Base (from default rate)
Predicted Margin = Predicted Charge - Predicted Pay

Note:

If a placement has a rotation the Units figure in this calculation will be the number of selected working days in the period.

Example 1

Weekly timesheet
Hourly rate
Pay: £20
Charge: £30
Contracted hours: 40

The calculation:

Active weeks = 7 / 7 = 1

Units = (40 x 1) / (60 / 60) = 40

Predicted pay = 40 x 20 = £800

Predicted charge = 40 x 30 = £1200

Predicted margin = 1200 - 800 = £400

Example 2

Weekly timesheet
Hourly rate
Pay: £20
Charge: £30
Contracted hours: 40
Placement ends 3 days into the week.

The calculation:

Active weeks = 3 / 7 = 0.428571429

Units = (40 x 0.428571429) / (60 / 60) = 17.142857143

Predicted pay = 17.142857143 x 20 = £342.86

Predicted charge = 17.142857143 x 30 = £514.29

Predicted margin = 514.29 - 342.86 = £171.43

Example 3

31-day monthly timesheet
Daily rate
Duration: 480
Pay: £100
Charge: £150
Contracted hours: 40

The calculation:

Active weeks = 31 / 7 = 4.428571429

Units = (40 x 4.428571429) / (480 / 60) = 22.142857143

Predicted pay = 22.142857143 x 100 = £2214.29

Predicted charge = 22.142857143 x 150 = £3321.43

Predicted margin = 3321.43 - 2214.29 = £1107.14

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