Using the image contribution report, you can associate your purchases directly with outgoing invoices, so that you can work out the contribution or agency fee for each invoice, by client and by month.
- Associate expenses and orders with each invoice
- Work out contribution per invoice, per client and per month.
- Spread the costs over multiple invoices using partial billing.
What is contribution
Every agency seems to have a different name for this one. Contribution is sometimes referred to as agency fee. It’s the revenue minus third party costs. With a simple example: a design agency creates a brochure for a client. They invoice the project for $5,000, which includes the printing cost for $2,200. The invoice contribution is $2,800.
Essentially, the contribution is the fee the agency takes in after paying the suppliers directly associated with the project. Except with this report, instead of working out the fee per project, we work it out for each invoice. That way, when projects run for multiple months, we can work out the actual contribution and keep an eye on cashflow month after month.
Connecting the dots
While invoices and expenses are both connected to the same job, there is no way to tell which expense has been billed out to the client on which invoice. So the invoice contribution is a tool that lets you connect those dots. It first makes an estimated guess, based on how many invoices there are, the job status and the dates of the expenses and the invoices. The user then needs to go through to confirm the links and store them. Just confirm if an expense was billed out completely, partially or not at all. Once a month you can validate the costs against each of your invoices so the contribution shows up correctly in all other reports.
Once the invoices are validated, you can see the contribution in different places. The invoice contribution report shows you the revenue, cost and contribution for the selected period. The data is graphed out in different ways in this report. But the contribution data can also be used in the Invoice Report or the Annual Revenue report.