The guide explains how MSPCFO calculates labor-to-product splits across various agreement structures. Here are some of the areas covered in this guide:

1. Differentiation of Labor and Product Revenue: MSPCFO’s methodology is crucial for accurately distinguishing between labor and product revenue within fixed fee agreements, which helps in optimizing financial reporting and profitability. ​
2. Application to Different Agreement Types: The guide explains how MSPCFO’s methodology applies to various agreement types, including License & Subscription (product-only) agreements and Fixed Fee Agreements (labor-only or labor & product).
3. Handling Different Agreement Setups: The guide provides examples of common agreement setups and how MSPCFO handles them, such as product costs and prices for each addition line, SKUs with unit costs but no unit prices, and SKUs with both labor and product components.
4. Universal Assumptions and Adjustments: MSPCFO uses universal assumptions like Min COGS% and Margin % to determine the revenue split between labor and product. ​ It also allows for adjustments like Product Cost Override, Product Price Override, and Zero Price Enabled to ensure accurate revenue allocation. ​
5. Common Agreement Setup Issues: The guide highlights common issues such as labor components in unit costs, missing product costs, and misidentified agreements, and explains their consequences on financial reporting and profitability.

Click on the link below to download a PDF of the guide: