Help Center
Go back to application
Help Center
Go back to application
WizeHub Status
Reference Guides
How To Guides
Adding Client Managers to the Lead Pipeline, Revenue Won & Lost and Client PortfolioChange your Password and setup Multi Factor Authentication Change the Senior Client Manager of a Production TeamFAB5 Monthly Data Entry ChecklistFinancial Year Rollover | Pre-Rollover Guidelines Financial Year RolloverConnecting Xero Practice Manager (XPM) to WizeHub
Discover
Plan
Execute
Measure
Align
Acquisitions
Settings
Product Updates
FAQs
How do I classify clients using ABCD categories?How do I determine the types of communication traffic?What productivity targets do I set for team members?What is billable time versus non-billable time?What charge rate multiple do I apply to production team members? What is the right resource mix when allocating Finders, Minders & Grinders to jobs?What is the best way to account for one-off fees when capturing revenue won or lost?Can inactive employees be permanently deleted from People?What happens during the financial year rollover process?Can we allocate multiple roles to an employee e.g. A Senior Client Manager who is also a Chief Marketing Officer?Is there a standard benchmark for revenue and client volume by class?
Troubleshooting

What is the best way to account for one-off fees when capturing revenue won or lost?

Revenue Won & Lost and Budget Preparation

To help owners and managers make a decision on how the business will capture "one-off" fees, we will first provide some context on the impact of Revenue Won & Lost on the preparation of your annual revenue budget.

Capturing Revenue Won & Lost is not just about recording the value of annual revenue won for a client, or annual revenue lost, but it is centred on timing ie. when the business invoices the revenue. Timing means the invoice will be fully or partially included in current year billing, or fully or partially invoiced in the following year. 

Therefore, when you record Revenue Won & Lost, you will assign annual revenue to the financial year the invoice will be issued and use this information when you build your revenue budget in the following year.

Example: 23 Degrees has won a client, North Star with annual revenue of $10,000 plus one-off advisory for $2,000. North Star will be invoiced $3,000 for compliance and $2,000 for advisory in the current financial year and $7,000 for compliance in the following year. Revenue won will be recorded as follows:

Tax & Accounting Division 

  • $5,000 allocated to 2024 (including one-off fees for $2,000)
  • $7,000 allocated to 2025 

When 23 Degrees prepares the annual revenue budget for 2025, the baseline starts with annual revenue billed in the 2024 financial year. Using the client example above, the baseline revenue will include $2,000 of one-off fees. How does a business account for one-off fees that have not been lost, but they will not be invoiced in the 2025 financial year?

What is the best way to account for one-off fees?

Ultimately, your Revenue Won & Lost helps you manage your budget of expected income for the upcoming year, and quantifying the gap from non-repeating revenue. Since Revenue Won & Lost is built off annual recurring revenue, recording one-off work in Revenue Won can impact the quality of the 'budgeted fees' rolling forward.

The primary thing to focus on is capturing the annual recurring revenue when you win or lose revenue. 

The secondary aspect is capturing one-off fees and deciding how you prefer to track it. Since all revenue, whether recurring or one-off, do impact the revenue base when it comes to budget preparation each year, it does require consideration. 

Options:

  1. Decide that one-off work under $X is not recorded as it is typically replaced by another job of similar value each year.
  2. Decide that you want to keep track of all sales including one-off fees: 
    1. Create a client industry source called 'One-off work" or something meaningful to your business. Filter revenue in this category to determine the value of non-recurring revenueand deduct the total from your revenue base when you prepare your budget next year; or
    2. Record revenue won and record a corresponding entry in revenue lost for the following year. Add 'One-off work' to the reason for revenue lost. This method ensures you capture revenue won (which forms part of the revenue base) and at the same time, the budget planning process includes a section for revenue lost which off-sets non-recurring revenue. Some users prefer to use this method because their is a placeholder for the information and you don't have to remember to do a manual adjustment to the revenue base using option 1 above.

Applying option 1 or 2 above ensures you do not overstate your budget with non-recurring revenue.

Powered by Product Fruits