Job Performance Reporting with Xero Practice Manager: Remaining budget

Reporting on job performance is split into two defined categories:

• Jobs that are in progress
• Jobs that are completed.

Our jobs that are in progress can also be called open jobs. We split our jobs into these two categories because we make different decisions depending on what jobs we are looking at. Our open jobs are changing daily with every time sheet, cost or invoice, whereas our closed jobs are static.

We should be reviewing our open jobs as frequently as possible as they give the best insight into how jobs are progressing. Our open jobs tell us what is happening right now, and can also give us insight into the future profitability of a job. If we keep a close eye on our open jobs and address issues as they arise, we will be running a much more efficient and profitable practice. We ultimately want to understand two things about our open jobs:

• Are we going to go over budget?
• Are we going to miss a deadline?

We want to answer these two questions for all our open jobs, as easily as possible. Doing this allows us to easily identify issues early so we can address them before they get out of control. We want to catch our potential write-offs while the job is open, rather than finding out once it is completed with an enormous write-off.

Open jobs tell us what is happening, whereas completed jobs tell us what has happened. If we look at what is happening, we can take quick and decisive action when we identify risks. When we look at what has happened, we can understand our mistakes and make changes for the future.

We manage our open jobs by exception. We look for indicators that suggest our job might go over budget, or miss a deadline. As long as those two events do not occur, our workflow moves smoothly like a well-oiled machine.

If we are not monitoring these indicators throughout the year, we may find ourselves eight weeks from financial year end with only half our tax returns filed, resulting in the team working evenings and weekends to catch up. What happens next? A third of your team say to themselves ‘never again’, and hand in their resignations. You are then scrambling to replace them while creating the exact environment to repeat the cycle.

There are three indicators you can use to see if a job is likely to go over budget:

• Remaining time
• Remaining budget
• Projected write-offs.