Realization

The concept of realization is to compare the recoverable amount for a piece of work against what it should be worth to you. This is a widely used measure in organizations that sell time, and is also known as recovery rate.

Your Charge Bands

In TrafficLIVE the value of a piece of work is determined by the charge band that is used for the task. The default rate on the charge band is assumed to be your non-discounted value.

The baseline calculation for realization is the value that the time would have been worth at the default rate.

Realization Example

Forecast Realization (The Job) — As the job progresses you might either under- or over-service the job. The work hours on the job should be your best re-estimate of the overall outcome. For example, the design work that you sold is worth $800. If you predict that the 10-hour task is now only going to take 7 hours, you have sold 7 x 100 ($700) of time, and you will receive $800 for it.

Because you can under-run the task, you have managed to take an expected realization of 80% up to a predicted 114% (800 / 700), which is good news.

Conversely, perhaps the job is going badly. You believe that the tasks are going to take 15 hours, so you have now sold 15 x 100 ($1500) of time, but you will still receive $800 for it. The predicted realization then falls to 53% (800 / 1500), which is bad news.

Final Realization (The Bill) — The job can only realistically deal with prediction; it does not know absolutely how many hours' work you are going to do, nor absolutely how much you are going to charge for it. These figures are only known when the job is complete, and the bill has been issued.

Returning to the preceding example, the design element had a win toward the end, and it finally required 14 hours. At the $100 default rate, this should have been worth $1400. The estimate was $800, so the final realization should be 57% (800 / 1400).

However, the account manager looked at the time entries and saw that there was a substantial change of scope. The account manager and the customer agreed that the final bill could be set at $1000. In the end, $1400 worth of work realized $1000, or 71% of its potential value (1000 / 1400).

Simple Single Measure

Realization provides a single measure of the predicted and actual performance of a job and brings together the impact of over- or under-servicing, discounts, and profit without the need for visibility into the underlying figures.

TrafficLIVE enables you to set a realization threshold that colors jobs and tasks red when they fall below that threshold.

Where you set this threshold depends on how you set your rates.

Actual Realization as Billed

The actual value of the work to you is the amount that you bill, which may or may not be the suggested bill as calculated by TrafficLIVE.

The job may prove more difficult than expected, and you may be able to discuss billing your client more. Conversely, the job may not have run smoothly, and you may concede to bill less.

The Realization as Billed can only be calculated when the job is in a billing status of Billing Complete. You can see this on the Financials page Overview tab in Financial Analysis.

When the job is in Billing Complete status, realization is calculated as: Time Billings as a percentage of Potential Value of Actual Hours worked.

For example, if you worked for 10 hours on Artwork ($80), this has a potential value of $800. The client rate was $65 per hour ($650), but for whatever reason you agreed to bill them $500. In this case realization is $500 / $800. You did $800 of work and got $500 for it.

Realization in Search Views

Realization is reported in Quote Search and Job Search. Realization that falls below the threshold level is reported in .

Points to Note

The realization fields are hidden by default. You can turn them on by clicking in the top-left corner of relevant grids.

All realization numbers are calculated on the server. You must click Update for the server to perform these calculations and return them to your view. Until you click Update, you see NaN (Not a Number).