budget analysis revenue per hour company capacity efficiency revenue/hr throughput guide video Analyzing Your Budget

If you're new to budgeting, the Analysis screen is the perfect way to end the process. Not only will it give you some great KPI's (key performance indicators) for your company, it will also analyze your budget and make recommendations based on industry averages.

 

 

In this video, we'll cover:

  • The major parts of the Budget | Analysis screen
  • What Revenue Per Man Hour means and how its calculated
  • What your Company Capacity means and how its calculated - including your company's efficiency rating
  • What Throughput means and how its calculated
  • How to use LMN's analysis recommendations to review numbers in your budget that (significantly) differ from industry averages

 

Reviewing the Analysis Tab of your Budget

The Analysis Tab of your budget has multiple areas which will prove useful when completing your LMN Budget.  Please see these areas explained below.

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Where is my Revenue Going?

    • The Where is my Revenue Going? area will break your Forecast Sales Revenue down by Profit, COGS and Overhead.

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Revenue per Man Hour

        • Revenue per Man Hour is a suggested total selling price for all labor, materials, equipment, subs, overhead and profit on a job.  
        • This will not affect your estimate numbers. It will instead serve as a suggested benchmark based on the numbers you have indicated in your budget.  Your actual Revenue per Hour will be displayed on the Dashboard tab for your Estimates.
        • Revenue per Man Hour is calculated within your Budget using your Forecast Sales Revenue divided by the Total Hours indicated in your Field Labor tab, minus the percentage of Unbillable Hours you indicate below.
        • % Unbillable Hours would be for loading/unloading, drive time, onsite internal meetings, etc.  Click HERE for more information on calculating your Unbillable Hours.
        • Click HERE to see average Revenue per Man Hour as well as further explanation behind Revenue per Man Hour.

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Capacity/Efficiency

        • Your company's Capacity/Efficiency will be calculated once you add an Average Chargeout Rate/Hr.
        • The Company Capacity is what your company should be able to earn in revenue based off of your Forecast Job Costs.  
        • Click HERE for more information on Company Capacity, including a breakdown on the calculation and industry averages for the Average Chargeout Rate/Hr.
        • Click HERE for for more information on your Efficiency %.

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Budget Ratio Analysis

        • The Budget Ratio Analysis will compare your COGS Ratios to the Industry Averages.
        • Industry Averages for your account are determined based on your Work Breakdown indicated on the Budget Info tab of the budget.  Click HERE for more information on how Industry Averages were collected.
        • The Budget Ratio analysis will provide you with suggestions on how to update your numbers if your Ratios differ (more than 2%) from the Industry Averages.

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Once you are comfortable with the information displayed in your budget, you can Activate it by clicking on the Activate button shown below!

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