When you run the Daily Earnings and Program Line Earnings reports, you can select how the earnings are calculated in the report results. In this article we explain what each option means and how it is calculated.
The actual earnings are calculated using the actual transactions that have been imported into the system to date.
As an example, imagine a program line with a fixed 2% rate and $100,000 of imported transactions. The actual earnings are 2% of $100,000, and the report will show earnings of $2,000.
In another example, a program line has retrospective tiers of $100,000 at 3%, $200,000 at 4% and $300,000 at 5%. When $110,000 of transactions have been imported against this program line, then the actual earnings will be $3,300, calculated as 3% of $110,000.
The accrual earnings are calculated using actual transactions, but they are based on the accrual rate. The accrual rates used in the calculation can be selected manually in the program line setup page for targeted deals by setting an accrual band. If you are using the Forecasting module the accrual band can be set to update automatically.
Using the same example retrospective program line introduced earlier, we have a 3% tier starting at $100,000, 4% at $200,000, and 5% at $300,000. $110,000 of transactions have been imported and the accrual band is set to the 5% band. Accrual earnings will be 5% of $110,000, making $5,500.
Note that accrual earnings can only be reported in the Daily Earnings report.
To explain actual forecast earnings, we must first explain how Enable calculates the forecasted transacted value. The forecasted transacted value is, by default, calculated as a linear extrapolation of the actual transacted value across the duration of the program line. The actual transacted value is multiplied by a scaling factor X/Y, where X is the duration of the program line in days, and Y is the number of days between the start of the program and the latest transaction date for the program line (inclusive).
If you are using the Forecasting module it is possible to calculate forecasted transacted values using non-linear calculations, and the forecasted transacted values from the Forecasting module will be used in the earnings calculations instead. See our article covering forecasting program line earnings for more information.
Enable then determines the target band that will be reached using the forecasted transacted value, and the rate for the forecasted target band is set as the forecasted earnings rate. The actual forecast earnings are calculated from actual transaction values applied to the forecasted rate.
Using the same example program line with 3% earnings at $100,000, 4% at $200,000 and 5% at $300,000. Halfway through the year, $110,000 of transactions have been imported for this program line. Taking the linear approach to forecasting, the forecasted transacted value will be $220,000, so the forecasted rate is 4%. Applying this rate to the actual transactions, earnings will be reported as $4,400, being 4% of $110,000.
Note that actual forecast earnings can only be reported in the Daily Earnings report.
In contrast with the actual forecast earnings, forecast earnings are calculated based on the forecast rate being applied to forecasted transacted value instead of the actual transacted value.
Using the same example as above, the forecasted transacted value is $220,000 and the forecast rate is 4%. This means that the forecast earnings will be $8,800.
Note that forecast earnings can only be reported from the Program Line Earnings report.