Client Profitability Report

In this article: 

• Description
• Use Cases
• Where to Find It
• Available Filters
• Report Output
• Additional Notes

Description

The Client Profitability Report looks at the time and expenses recorded within the report period and breaks them down by their bill behavior and whether they have been billed. If they have been billed, it will show any adjustments/ discounts applied during billing and any write-offs to those bills. Lastly, it will show whether the bills for those items have been paid.  

Use Cases

The Client Profitability Report is designed to give you insights into the gains and losses you made based on the effort put in. It examines the value of the time recorded during a specific period and shows if you are getting a return on it or if discounts, write-offs, writing down time (by making it no charge or hide) and bad debts are stopping you from realizing the full potential of the work done. If you want a picture of who your most profitable clients are, you should run it for everything to date. If you want to measure the return on the effort that went into one period vs. the next, you can run it for smaller periods and compare the results (e.g., 2023 vs. 2024). 

Where to Find It

In Actionstep, go to Reports > Billing > General.

Available Filters

Basic Tab 

• WIP and Invoice Date range: Choose the date range for the report (and enter any required dates in that range). 
• Responsible lawyer: Select the responsible lawyers you want included in the report.  
• Currency (Only displayed if you have multi-currency enabled): Select the currency for which to run the report. Only invoices of the selected currency will be displayed. 
• Show matters with no AR: Select this option to allow the report to display information from matters that have been billed in the past but currently have no AR. (By default, the report will not display information for matters with no AR and WIP.)
  NOTE:  Matters that have never had WIP will not be displayed with this option.
  
• Show matter detail: Toggle this option on to display a table for each matter. This toggle can be useful to expose matter details or hide them to only reference summaries. 
• Show firm summary: Toggle this option to on to display a Firm Summary table, which shows a total of all items you've selected to include in the report.  

Advanced Tab

• Matter type: Choose the matter types you want included in the report.  
• Matter: Choose the matters you want included in the report. 
• Client: Choose the clients you want included in the report. 
• Bill type: Choose the bill types you want included in the report. Your options are Hourly and Fixed fee. 
• E-Billing: If a matter uses e-billing, choose the e-billing information you want included in the report. Your options include:  
  • All displays any matter regardless of whether it uses e-billing.  
  • Enabled filters for only matters with e-billing.  
  • Disabled filters to matters not using e-billing.  
• Exclude unbilled items: Toggle this option to on to exclude unbilled values and not factor them into any values. By default, this option is toggled to off, which allows the report to display values of unbilled entries.
  
• Show matters with no data: (This option works in conjunction with the Show matters with no AR option on the Basic filters tab.) Toggle this option to on to include matters in the report even if they have no bills or associated hours/fees. This can be useful to see specifically which matters have no associated work. 
• Show client summary: Toggle this option to on to display client-based summaries. Individual tables are displayed per client that include only information for matters with that client. 
• Show matter type summary: Toggle this option to on to display tables for each matter type.  
• Show bill type summary: Toggle this option to on to display tables by the billing arrangement set in the matter's billing options. There can be separate tables for Hourly matters and Fixed fee matters. 
• Sort detail by: Choose the order in which matter detail tables will be displayed on the report:  
  • Responsible lawyer sorts results based on the responsible lawyers' name, alphabetically ascending. This sort order is based on the Contact name format field in Admin > General settings. This means the order could be determined by the first, last, or preferred name, depending upon the setting.  
  • Client sorts results based on the client's name, alphabetically ascending. Uses the Contact name format field in Admin > General settings to determine alphabetization. 
• Matter type sorts table order alphabetically by Matter type. 
• Matter name sorts table order alphabetically by Matter name. 
• Matter ID sorts table order numerically by Matter ID.

Report Output

Depending on your report filters, this report can include multiple tables: 

Matter Detail (Basic)     

The Matter Detail table displays the profitability information for a specific matter: 

• Table Title (e.g., [Matter Name (Matter ID]) 
• Client / Customer name 
• Matter Type 
• Responsible lawyer 
• Bill type: Fixed fee or Hourly 
• Avg. days to bill: The number of days between when items for a bill are created to the point those items are billed, for example, a fee entry created two days ago and billed today took two days to bill. 
• Average days to pay: The average time it takes for bills on the matter to be fully paid. Calculated with each bill's AR date and the date of the final payment that brings the bill's Balance Due to zero. 

Firm Summary (Basic)     

The Firm summary table provides profitability information for all items for which the report is currently filtered. The header above the table provides the following information: 

• Table Title (e.g., Firm Summary) 
• Avg days to bill: The average time it takes from when bill items are created until they are billed. 
• Average days to pay: The average time it takes for a bill to be paid once it is created. Calculated from the bills' AR date. 

Client Summary (Advanced) 

The Client Summary table displays profitability information for all bills and matters associated with that client: 

• Table Title (e.g., Client Summary - [Client's Name]) 
• Average days to bill: Average time it takes from when bill items are created until they are billed. 
• Average days to pay: The average time it takes for a bill to be paid once it is created. Calculated from the bills' AR date. 

Matter Type Summary (Advanced)     

The matter type summary table provides profitability information for all matters of a specific matter type: 

• Table Title (e.g., Matter type summary [Matter Type Name]) 
• Average days to bill: Average time it takes from when bill items are created until they are billed.
• Average days to pay: The average time it takes for a bill to be paid once it is created. Calculated from the bills' AR date.

Bill Type Summary (Advanced)     

The bill type summary table provides profitability information by bill type. If multiple bill types are used in the system, a table will be created for each: 

• Table Title (e.g., Bill type summary - [Fixed fee or Hourly]) 
• Average days to bill: Average time it takes from when bill items are created until they are billed. 
• Average days to pay: The average time it takes for a bill to be paid once it is created. Calculated from the bills' AR date. 

Each of these tables includes the following columns of data: 

• Items: The Items column contains the row designations for the table. Each item is the category for all subsequent information in that row: 
  • Billable fees: Shows the time/fee entries with a bill behavior of Bill designated on the entry. 
  • NC/hide fees: Shows time/fee entries with a bill behavior of No Charge or Hide designated for the entry.
  • Fee totals: Shows a total of the figures in the Billable fees and NC/hide fees rows.
  • Expenses: Shows expense entry figures that are valid for the current table.
    NOTE:  This row only reflects items billed to clients/customers. It does not include figures from Supplier Invoices.
• Work Unbilled (Hours and Value): The number of hours that have yet to be billed as well as the monetary value of the unbilled hours.
• Work Billed (Hours and Value): The number of hours that have been billed as well as the monetary value of the billed hours.
• Work Total (Value): The summed values of unbilled and billed hours.
• Billing:
  • Billed: Shows the total fee value that has been billed.
  • Adj. Amt: Shows the total fee adjustments on bills.
  • Discount: Shows the total discounts applied to bills.
  • Total: Shows the total value of billed fees +/- adjustments – discounts.
  • Write-Off: Shows any write-offs that have been applied to the billed items regardless of the date of the write-off.
• Effective:
  
  • Unbilled Hr $: Shows the average rate of unbilled hours. This is calculated as Unbilled value/unbilled hours.
  • Billed Hr $: Shows the average rate of billed hours, after taking into account adjustments, discounts and write-offs. This is calculated as (Billed value +/- adjustments - |discount|).
  • Billing (Realization): Shows the percent of fees/expenses billed against unbilled fees/expenses minus any negative adjustments, discounts, and write-offs. This is calculated as (Unbilled items +/- |fee adjustments| - |discount| - |write-offs|) / (Billed items + unbilled items).
    
    NOTE:  Discounts and write-offs are always negative figures. The calculation above uses the absolute values of those figures. Fee adjustments can be negative or positive. If positive, they are added. If negative, they are subtracted.
• Collection:
  • Paid shows the amount of billed items for which payments have been received. 
  • Realization shows the percentage of billed items that have been collected. This is calculated as Paid amount divided by (paid + AR).
  • % Collected shows the percentage of the paid amount against paid amount plus AR. This is calculated as Paid amount / (paid amount + AR bal).
  • AR Bal shows the amount that has been billed but not yet collected.

Additional Notes

One of the key factors in understanding this report is that the information it shows is based on the date that the time and/or disbursement is recorded. If you record $1000 in May and you then bill that $1000 in June, when you run the report for May, that $1000 will show. When you run it for June, it will not. The report doesn't need the time/disbursement to be created and entered in the same period. It will look at the entry and see if it has been billed ever.   

To give another example, let's say you record three time entries in January. One worth $500 was billed in February, the next was worth $200 and was billed in March. The third for $300 was never billed. There are no other time entries on the matter. When you run the report for February or March, it shows nothing. When you run it for January, it will show  $700 as billed and $300 as unbilled. You will get the exact same results if you run the report to cover all of January and February, and again the same if you run it to cover January to March.