Most agencies do a month-end report, looking at whether they met revenue targets, exceeded them, or underperformed. Did they meet capacity target, what that meant in terms of hours. Great, now you’ve got the figures. But what are you going to do with them? The moment’s passed, and all you can do now is say ‘this is what we lost out on.’
The secret to success is spotting underperformance early on so you can take action.
You’re probably already doing many of the right things, but likely just not often enough. Instead of a monthly view of your business, do a weekly review. This immediately helps you spot issues and be more proactive. If there’s not enough capacity, how can you help manage workloads? If there’s not enough work, are there any opportunities you can pursue and push through?
A week is a long time at an agency
You’ve heard this said about politics. But agency life moves fast, and things change by the day. A monthly review is like reading the news from four weeks ago and expecting some illumination. But if operations or finance teams meet with department heads every week, they can review performance data, see where it’s heading, and plan actions to get on (or stay on) track.
This is where the expertise of department heads comes in. They know their clients, tasks and teams, and know what needs to by delivered by each person each week. They can get their teams on board, helping them understand why they’re being asked to deliver a certain number of hours for a specific project, or work on a pitch to get an opportunity off the ground.
You can then carry out more detailed monthly reviews to really get an accurate picture of your figures and help with your planning.
The reports I’d recommend you look at each week and month are:
- Estimated vs actual hours: Are you under or overservicing (spending more or less time than estimated).
- Job progress: If a job or retainer is a month long, at week one they should be at roughly 25%, week 2 at 50% etc. Are you on track each week, ready to invoice at the end of the month? If the work isn’t delivered in the month, the time will trickle over into the next month, which then has a knock-on effect into how much can be delivered that month. The reports help people keep a handle on their timings and monitors for any overservicing.
- Billable capacity / target chargeable: Is your capacity for the following week in line with target, and scheduled work. Or could you sell any additional hours?
- Lost hours: Missing time: is there unaccounted-for time that hasn’t been tracked or posted?
- Invoicing: Make sure all job due dates and invoice dates are accurate for precise financial reporting. Check if there are any phases or jobs that are finished or closed off that haven’t yet been invoiced. And ask why.
- Forecast vs actual revenue and costs: Are you in line with where you should be? Calculate revenue, salary and outsourcing costs versus your target.
- Opportunity pipeline for week/month: How many opportunities are paying off, and how many are you losing out on?
You’ll soon notice any red flags, such as inaccurate estimating, overservicing, human error, shifting goal posts. Now look at how to tackle these. You want to support your staff to hit their targets and be as productive as possible. This does mean holding them accountable, but could also mean you see opportunities for extra training, for example. Make sure you have a good hierarchy in place, so people-management issues can be escalated.
High performance at an agency is crucial to stay profitable. Getting down to the granular details can really help you see where you’re at… and where you could be at.