Overview
Revenue information typically becomes less relevant the older it is, so projecting revenue based on the most valuable inputs your firm has available can often be preferable to historical analysis. To ensure your firm has an accurate set of revenue projections to work with, we've enabled multiple calculation options for the Annual Revenue fields on Assets and Services.
Expanded Calculation Options for Annual Revenue
The following calculation methods are available on Assets and Services:
|
Calculation Method |
Asset field |
Service field |
|---|---|---|
|
Service based on Service Fees & AUM, Asset-based on the percentage share |
A percentage of the Service's Annual Revenue that's equivalent to the Asset Value as a percentage of the Service AUM, e.g.: If a Service has an AUM of $5M and an AR of $5k, then an Asset in that Service with a Current Value of $1M would have an AR of $1k; 20% of the overall Service value. |
Using the AUM value captured on the Service record, apply the fee structure defined in the Service Type Takes the AUM for the record and applies the Service Fees structure to it, as we do today both for itself and for Deals. |
|
Asset-based on Last Installment & Multiplier, Service based on Asset rollup |
Takes the Installment record related to it, which has the most recent Installment Date, and multiplies its Final Value by the number stored in the Annual Revenue Multiplier custom setting. |
The sum of Annual Revenue from all related Assets marked as Under Advice. |
|
Asset sourced via integration, Service based on Asset rollup |
The field value is not calculated automatically. Instead, it's provided separately by a bespoke integration, which populates the field directly. |
The sum of Annual Revenue from all related Assets marked as Under Advice. |
Considerations and Questions
How Do I Choose Which Calculation Method My Firm Should Use?
There are some easy guidelines to follow when making your choice of calculation method:
- If you're using an integration that populates the Annual Revenue field on Assets directly, use Asset sourced via integration, Service based on Asset rollup.
- Otherwise, if you're actively tracking Installments, use Asset based on Last Installment & Multiplier, Service based on Asset rollup.
- Otherwise, if you've set up your Service Types with Fees, use Service based on Service Fees & AUM, Asset-based on percentage share.
If none of these settings apply to your firm just yet, consider setting up 📚Service Fees. It's less accurate than the other two options; however, it's easy to get started without any integrations or data capture to worry about.
How Do I Set the Calculation Method?
From Salesforce Setup, go to Custom Metadata Types, and click Manage Records next to Practifi Feature Settings. Annual Revenue Calculation Basis appears as a picklist field here.
How Do I Set the Multiplier if I Need It?
The multiplier value is configured from the same location as the calculation basis above. Set this value based on the time period that a typical Installment record encapsulates, e.g. if your firm's Installments are typically captured on a monthly basis, then set the multiplier value to 12.
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