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 Team Member
What’s in this Report?
Does include:
Archived and deleted Time Entries
Inactive clients
Does not include:
Archived and deleted clients
Archived and deleted Invoices
Report type | Column description | Permissions requirements |
Revenue by Team Member: shows a revenue breakdown by the assigned team member | Team Member: employee tracked
Date Range: revenue accrued between the chosen dates
Total: total revenue from the chosen period
*Billed service items associated with billed time entries will be included in this report. Billed service items not associated with billed time entries will not be included. | Billing Reports, Access To All Clients |
📊 What is a Revenue by Team Member Report?
A Revenue by Team Member Report is a financial document that breaks down the revenue generated by each individual team member within a business. This report shows how much income each employee or team member contributes, typically focusing on those in roles directly linked to revenue generation, such as salespeople, consultants, or service providers. The report helps the business assess the performance and productivity of each team member.
👨🏻💼 Why Would a CPA Need It?
A CPA would need this report for several key reasons:
Performance Evaluation: The report helps the CPA and management evaluate the productivity and effectiveness of individual team members. This can inform decisions about promotions, bonuses, or additional training.
Compensation and Incentives: The report can be used to design compensation structures, such as commissions or bonuses, that align with the revenue contributions of team members.
Resource Allocation: By understanding which team members generate the most revenue, the CPA can advise on where to allocate resources, such as additional support or marketing efforts, to maximize overall profitability.
Team and Individual Goal Setting: The report provides a basis for setting realistic revenue goals for both the team as a whole and individual members, helping to drive performance.
Strategic Planning: Understanding the revenue contributions of each team member can guide decisions on hiring, training, and team development to ensure the business continues to grow its revenue effectively.
🔢 How is the Math Calculated for This Report?
The math behind a Revenue by Team Member Report involves several key steps:
Identifying Revenue-Generating Activities:
Each team member’s revenue-generating activities are tracked. This could include sales closed, services provided, or projects completed by the team member.
Summing Revenue by Team Member:
For each team member, the total revenue is calculated by summing all the sales or billable activities they are responsible for.
For example, if a salesperson closes three deals worth $10,000, $15,000, and $5,000, the total revenue for that team member would be $30,000.
Calculating Total Revenue:
The total revenue for the business is calculated by summing the revenue generated by all team members.
If five team members generate $30,000, $20,000, $25,000, $15,000, and $10,000 respectively, the total revenue would be $100,000.
Percentage of Total Revenue:
To understand each team member’s contribution, the percentage of total revenue is calculated for each person.
For example, if a team member generates $30,000 out of a total revenue of $100,000, they contribute 30% to the total revenue.
✏️ Example Calculation:
Let’s assume a company has the following revenue data for its team members:
Team Member A:
Revenue: $30,000
Team Member B:
Revenue: $20,000
Team Member C:
Revenue: $25,000
Team Member D:
Revenue: $15,000
Team Member E:
Revenue: $10,000
Calculations:
Team Member A:
Total Revenue = $30,000
Percentage of Total Revenue = ($30,000 / $100,000) * 100 = 30%
Team Member B:
Total Revenue = $20,000
Percentage of Total Revenue = ($20,000 / $100,000) * 100 = 20%
Team Member C:
Total Revenue = $25,000
Percentage of Total Revenue = ($25,000 / $100,000) * 100 = 25%
Team Member D:
Total Revenue = $15,000
Percentage of Total Revenue = ($15,000 / $100,000) * 100 = 15%
Team Member E:
Total Revenue = $10,000
Percentage of Total Revenue = ($10,000 / $100,000) * 100 = 10%
The report would list each team member along with the total revenue they’ve generated and their percentage of the overall revenue. This helps the CPA and the business understand the performance of individual team members and make informed decisions about resource allocation, compensation, and team management.