What would happen to the profitability and efficiency of an agreement if you made some different business choices? This report provides you the ability to see the impact of  your business variations. Choose from six different levers that are geared toward pricing and costing decisions to see how these actions can impact key profitability and pricing matrices.

The report will answer some of the following questions:

• What changes can be made to a FFA agreement to make the agreement more efficient?
• How will rising product costs effect the profitability of an agreement?
• If I want to increase product margins across all agreements, what would that mean to my bottom line?

These are just some of the questions that can be answered by a 'what if' scenario when adjusting an agreement.  The purpose of the Agreement Adjustments report is to show you outcomes by changing certain parameters of the agreement.

The report can be found near the bottom of the reports in the FFA tab.

The filters allow you to select recurring  fixed fee agreements from:

1. Date range
   A predefined date range (Quick Select) or customized date range
2. Adjustment Type
   End points for the agreement can be User-based or Node-based depending if the agreement is user centric or based on configuration end points
3. Client
   General client list (all clients, aggregates, one client, selected range)
4. Agreement Category
   Select all agreement categories or a selected group of agreement categories
5. Agreements
   Select all agreements or a selected group of agreements (this would be within the Agreement Category(ies) if this is set in your filter)
6. Use Current Node Count - check if the span of time is more than a month and you want the most current node count.
7. Exclude Expired Agreements - Only include agreements that do not have a date_end previous to the time range.

Note: The report can be downloaded to an Excel/CSV spreadsheet or in PDF format. When the '+' is used, the report is stored in a Download Basket to be downloaded with other reports at a later time. Once the appropriate filters are been applied to the report, a Report Profile can be saved and used for recurring deliveries (See How to set up Recurring Report Deliveries).

The report shows the current data for the agreement(s) over the filtered period of time in the Current column (1). The next column, Adjustments (2) contains a lever that can be adjusted. This is where you have  the opportunity to change a metric or a group of metrics that will impact your agreements.  The last column. Adjusted (3) shows you the results of the change in levers on your agreements.

Example 1:

A client is using very expensive resources and quite a few extras are included under the agreement. See what happens if you decrease your labor costs under the agreement by:  1)use less expensive resources, and 2) limit some of the work covered by the agreement. The resulting changes will effect the efficiency and the profitability of the client. In the report below, the Shadow Billable is reduced from $150 to $125 (less expensive resources) and Hours/Node is reduced by 5%.  The Effective Rate of the agreement improves by $7 and the Efficiency goes from .91 to 1.15 with a slight increase in gross margin.

Example 2:

A client's efficiency is low. How much will labor need to be increased to raise their efficiency to .8? The client efficiency for the past year is .69. To achieve an efficiency of .80, the annual labor revenue must go up by $4,817.

Example 3:

What is the effect on my margins if the products sold in an FFA agreement increased by 5% (an increase of about $72,600 dollars for the year)?  The gross margin for products would go from 29.5% to 32.86%. The gross margin for agreements would go up by .28%.