Capacity v Demand
The Capacity v Demand function compares the projected monthly income with the projected monthly capacity to identify the Capacity Surplus/(Deficiency).
Under Capacity Summary, you can also compare the projected annual income with the projected annual capacity (ie simplified version)
We will refer to the screenshot below to explain the key features;
There is an option at the top to analyse by Hours or Cost. We have selected Hours in this instance.
The Projected Income is based on the accounts that have been flagged as Capacity Building under Chart of Accounts.
Under Projected Income it shows the Total Capacity. This is prior to the Recovery % being applied. If you click on the switch button, it will compare the Projected Income to the Effective Capacity (after Recovery %).
If you double click on "Total Capacity" it will show you the capacity per employee.
If you change the option to Cost, you will need to enter the Target Labour Cost %. In example below, we have entered a 30% target labour cost %;
Magnifi will calculate the projected Capacity Surplus/Deficiency by comparing the Target Labour Cost % with the Budgeted Labour Cost %.