Financial reports help businesses see how they're doing and make better decisions. In this series, each article will explain a specific report, covering what it is, why a CPA needs it, how the numbers are calculated, and a simple example to show how it works. Whether it's about tracking income, managing costs, or checking how well your team is working, these articles will give you the basics to make sense of these important reports.
Revenue by Client
What’s in this Report?
Does not include:
Archived, inactive, and deleted clients
Archived and deleted Invoices
Report type | Column description | Permissions requirements |
Profitability: shows the total profit for each task in Canopy using Time, Labor Cost, and Amount Billed | Group: by Client or Service Item
Time Tracked By: the team member who tracked hours for the client
Total Hours: total hours tracked
Billed Hours: hours that have been added to an invoice
Billable Amount: calculated by multiplying the rate by the duration of the time entries
Adjusted Amount: calculated by taking the billed amount less the billable amount
Billed Amount: the amount that has been billed to the customer (For the most accurate reporting, ensure that time entries are linked to invoices.)
Labor Cost: team member's hourly rate multiplied by the hours tracked
Balance: amount owed by a customer | Billing Reports, Access To All Clients, Team Member Salary |
📊 What is a Revenue by Client Report?
A Revenue by Client Report is a financial document that details the total revenue a business earns from each of its clients over a specific period. This report breaks down the income generated by individual clients, showing how much each client contributes to the overall revenue. It’s often used to identify key clients and assess the concentration of revenue sources.
👨🏻💼 Why Would a CPA Need It?
A CPA would need this report for several important reasons:
Client Profitability Analysis: The report helps CPAs determine which clients are the most profitable. This can guide decisions on where to focus resources or negotiate better terms.
Revenue Concentration Risk: By analyzing revenue by client, the CPA can identify whether the business is overly dependent on a small number of clients, which could be risky if one of those clients leaves.
Strategic Planning: The report can inform business strategy, such as identifying high-value clients for special attention or expanding services to less profitable clients.
Forecasting and Budgeting: Understanding how much revenue comes from each client helps in creating more accurate forecasts and budgets. It also assists in setting revenue targets for sales teams.
Client Relationship Management: The report can be used to monitor changes in client revenue over time, helping the business maintain strong relationships with key clients and address any issues with declining accounts.
🔢 How is the Math Calculated for This Report?
The math behind a Revenue by Client Report involves several straightforward steps:
Identifying Revenue Sources:
The report identifies all the revenue earned from each client during the specified period. This includes all sales, services, or billable activities associated with that client.
Summing Revenue by Client:
For each client, the total revenue is calculated by summing all the invoices or sales records related to that client.
For example, if Client A has three invoices: $10,000, $5,000, and $15,000, the total revenue from Client A would be $30,000.
Calculating Total Revenue:
The total revenue for the business is calculated by summing the revenue from all clients.
If the company has 5 clients with revenues of $30,000, $20,000, $10,000, $15,000, and $25,000 respectively, the total revenue would be $100,000.
Percentage of Total Revenue:
To understand each client’s contribution, the percentage of total revenue is calculated for each client.
For example, if Client A’s revenue is $30,000 and the total revenue is $100,000, Client A contributes 30% to the total revenue.
✏️ Example Calculation:
Let’s assume a company has the following revenue data for its clients:
Client A:
Revenue: $30,000
Client B:
Revenue: $20,000
Client C:
Revenue: $10,000
Client D:
Revenue: $15,000
Client E:
Revenue: $25,000
Calculations:
Client A:
Total Revenue = $30,000
Percentage of Total Revenue = ($30,000 / $100,000) * 100 = 30%
Client B:
Total Revenue = $20,000
Percentage of Total Revenue = ($20,000 / $100,000) * 100 = 20%
Client C:
Total Revenue = $10,000
Percentage of Total Revenue = ($10,000 / $100,000) * 100 = 10%
Client D:
Total Revenue = $15,000
Percentage of Total Revenue = ($15,000 / $100,000) * 100 = 15%
Client E:
Total Revenue = $25,000
Percentage of Total Revenue = ($25,000 / $100,000) * 100 = 25%
The report would list each client along with the total revenue they’ve generated and their percentage of the overall revenue. This helps the CPA and the business understand how much each client contributes to their financial success and allows them to identify any dependencies or opportunities.