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Bookings and Backlog

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Imagine the result

Key Financial Metrics Gross Revenue

Net Revenue

Net Revenue Multiplier

Financial Billability

Operating Income (Income after Corporate Overhead)

Return on Net Revenue (Income percent of net revenue)

Bookings

Backlog

DRO (Days Revenue Outstanding)

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Why Do Bookings

and Backlog Matter?

Backlog defines contracted workload by division and business unit

Helps to project hiring needs and balance workload

Allows management to measure sales versus burn rate and workload projections

Measures success of client development efforts at division, business unit and client levels

Imagine the resultImagine the result

Bookings and Backlog

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Bookings“The Basics”

Definition: The amount of Net Revenue that will be earned on a project

Basic Calculation:

Total Compensation minus (Subcontractor Cost Budget + ODCs Cost Budget)

In other words: Labor Revenue + Subcontractor Markups

Who gets credit? Client (Primary Client)Market Sector or Market Area (assigned to Client)Business Unit (Project location)Division (Project location)

When is it calculated?

Calculating nightly to appear in Roll Based Reporting

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Terminology Bookings

Metric Contract Value Net Booking

Subcontractor Compensation

$15,000 cost + $1,500 markup =

$16,500

$1,500

ODCs Compensation $500 cost + no markup

$0

Labor Compensation $3,000 $3,000

Total Contract= $20,000

Booking = $4,500

Project Success = Company Success

Imagine the result

Backlog“The Basics”

Definition: The amount of Net Revenue that is “left” to earn on a project

Basic Calculation: Total Compensation minus the greater of (Subcontractor Cost Budget + ODCs Cost Budget) OR (JTD Subs and ODCs) minus JTD Net Revenue

If Revenue Group: Adds all phases together

Who gets credit? Client (Primary Client)Market Sector or Market Area (assigned to Client)Business Unit (Task location)Division (Task location)

When is it calculated? Calculating nightly to appear in Roll Based Reporting

Impact of Project Status: If entire project is made Dormant, all backlog is dropped

Imagine the result

Terminology Backlog

Project AB009999.00001

Contract Value Net Backlog

Task 00001Location TFS30

Environment, SER3, Tampa

Labor Comp $5,000Subs $500 + 10%

markup ($50)

$5,050

Task 00002Location TOSI0Infrastructure,

Strategic Services, Toledo

Labor Comp $5,000Expenses $450 no

markup

$5,000

Task 00003Location TOWN0

Water, Water North, Toledo

Labor Comp $5,000 $5,000

Total Contract = $16,000 Backlog = $15,050

Project Success = Company Success

Imagine the result

Bookings & Backlog

Relationship

“Key Equation”

Beginning Backlog Balance

+ Plus: Bookings Added

Less: Net Revenue Burned

= Equals: Ending Backlog Balance

Imagine the result

Debookings “The Dark Side”

Data entry correction – we entered a project forecast through Plan without an accurate cost budget and “over booked” and then “debooked” the next month

ARCADIS subcontracts work (labor) that we originally planned to do increasing the EAC expenses and reducing the EAC DL.

Prevention – plan contingencies as subcontractors rather than labor so we don’t over-book at the start

If project JTD subs + ODCs are higher than the total sub/ODC cost budget in VISION, the actual JTD expenses are used in the calculation

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Bookings/Backlog“Month 2 and beyond - “Now it gets tricky”

Backlog calculation doesn’t change – all project changes will flow through to new backlog

Total Compensation minus (Subcontractor Budget + ODCs Budget) minus JTD Net Revenue

What impacts the backlog calculations?• Project had an increase or decrease in compensation• Project made dormant, backlog will now be zero• Cost budget was entered or changed• If project JTD subs+ ODCs is higher than the total sub/ODC cost

budget in VISION, the actual JTD ODCs are used in the calculation

Backlog can be negative at the task level as long as the project in total has positive backlog

Bookings calculation is really the same but we now need to consider what might have changed so….

Bookings = Current Backlog minus Previous Backlog plus Current Net Revenue

Imagine the result

Bookings/Backlog Forecast History in the Project Review Dashboard

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Bookings/BacklogIncrease in Compensation

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Bookings/BacklogNegative Bookings (Convert work to Sub)

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Bookings/BacklogPositive Bookings (Convert to Self Perform)

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Bookings & Backlog

Reporting

Roll Based Reporting

– Bookings and Backlog Detail

– Client Profile

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Bookings/Backlog Roll Based Reporting

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Bookings/BacklogClient Profile

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Imagine the result