Capacity v Income – Analyse Capacity Surplus or Shortfall in Magnifi

Capacity v Income - Analyse Capacity Surplus or Shortfall

Purpose

This article explains how to use Capacity v Income to compare projected monthly income with projected monthly capacity, helping you identify a Capacity Surplus or Shortfall.

Using Monthly Capacity is optional. If you are not using Monthly Capacity, you can view Capacity – Annual Capacity for an annual comparison of projected income versus capacity.

When to Use

Use this function when you want to:
• Analyse whether your team’s available hours (capacity) are sufficient to deliver your projected income.
• Identify months where capacity is under- or over-utilised.
• Review overall capacity efficiency before finalising budgets or targets.

How To

Compare Projected Income to Capacity (Monthly View)

  1. Go to Capacity v Income from the Capacity menu.

  2. The toggle at the top defaults to Hours, which is the common and recommended option.

  3. The table compares Projected Income with Capacity and calculates the monthly Capacity Surplus/(Shortfall).

  4. Magnifi then divides the shortfall by your Average Rate per Hour to express the result as a difference in billable hours.

  5. It then divides that figure by Billable Hours per FTE to show the equivalent surplus/(shortfall) in FTEs.

  6. Hover over either Average Rate per Hour or Divide by Billable Hours per FTE to see how each value is calculated.

Understand Projected Income and Capacity

  1. Projected Income is based on accounts flagged as Capacity Building under Chart of Accounts.

  2. Total Capacity represents total available hours before applying the Recovery %.

  3. Click the switch icon beside Total Capacity to change the comparison from Total Capacity (before Recovery %) to Effective Capacity (after Recovery %).

  4. Double-click either Total Capacity or Effective Capacity to view capacity by employee.

Analyse by Cost (Labour %)

  1. Change the toggle at the top to Cost.

  2. Enter your Target Labour Cost % (for example, 50 %).

  3. Magnifi compares your Target Labour Cost % with the Budgeted Labour Cost % from projections.

  4. The difference determines the Capacity Surplus/(Shortfall), displayed in $ terms, then divided by the Average Cost per FTE to show the equivalent FTE variance.

  5. Hover over Total Average Cost per FTE to view the calculation.

Tips / FAQs

Q: What’s the difference between Total and Effective Capacity?
• Total Capacity is before applying the Recovery %.
• Effective Capacity reflects the actual deliverable hours after applying the Recovery %.

Q: How does the Surplus/(Shortfall) calculation differ between Hours and Cost modes?
• In Hours mode, the Surplus/(Shortfall) shows the excess or shortfall in billable hours.
• In Cost mode, it shows the variance between your Target and Budgeted Labour Cost %.
Both modes also display the variance in # FTEs for easy comparison.

Q: Where does Projected Income come from?
Projected Income is drawn from all accounts flagged as Capacity Building under the Chart of Accounts.