Knowing the true costs of running your organization will help you determine how best to maximize resource allocation and adjust pricing for your services. Tracking your direct and indirect costs is simplified with Amilia's cost recovery functionality!
The Cost Recovery>Costs tab is where you'll list your direct and indirect costs which
Amilia uses to calculate the cost recovery percentage:
Let's define some terms we'll be using as we create costs for our cost recovery analysis:
- Direct Costs- Expenses directly associated to running a specific activity or service. Ask yourself: Is this cost incurred as a direct result of this activity? If the answer is yes, then it is considered a direct cost;
- Indirect Costs- These expenses will be incurred regardless of the existence of an activity or service (as opposed to direct costs). They are broken down into two types: Administrative/Operating Costs and Location (Facility) Costs.
- Administrative Costs- Expenses that are neither related to specific activities or locations. They are the costs of living that an organization incurs throughout its life (ex:admin fees, office supplies, lawyer fees, etc.); and
- Facility Cost- A type of indirect cost related to the location(s) used to host your activities (ex: rent, building maintenance, electricity, etc.).
Listing Direct Costs
List all the direct costs related to running your individual activities.
- New direct cost: Create a new line to add your new cost item.
- Description: Edit the title of your cost (ex: Basketballs, Gym mats, Swim coaches, etc.).
- Amount: How much does the item cost? Indicate the amount in relation to the attribution.
- Cost Attribution: How will the costs will be calculated per item?
NOTE: Direct costs are calculated by linking them to each individual activity.
Listing Administrative Costs
List the costs of running the organization that do not include activity or facility related expenses. Administrative costs are categorized as being indirect costs.
- New Administrative Cost: Create a new line to add you new cost item.
- Description: Edit the title of your cost (ex: WiFi, Office Manager, Work vehicles, etc.)
- Amount: How much does the item cost? Indicate the amount in relation to the Frequency.
- Frequency: What is the cost frequency?
NOTE: A percentage of the total Administrative Costs are applied on each individual activity based on the total costs that have occurred for each one.
Listing Facility Costs
What costs are associated with running your facilities? Facility costs are categorized as indirect costs. You must create your facilities in the Resources module as well as link the facilities to your activities. Include the square footage to improve cost recovery accuracy.
- Name: Assign a name to your facility cost.
- Cost: How much does the item cost? Indicate the amount in relation to the Frequency.
- Location: Which Facility is linked to the cost?. Create Facilities in the Resources module.
- Frequency: How often does the cost occur?
NOTE: A percentage of the Facility Costs are applied on activities (linked to the facility) based on the total hours that have occurred in the activity.
Deleting Cost Recovery Data
Delete a cost entry by clicking on the icon.
Delete entire tables by clicking on the button on the upper right of the screen.
To remove activities, you must delete or cancel the activity via the Activities tab.
NOTE: If an activity has registrations, you cannot delete the activity.
Start assigning costs to your activities and watch the analysis happen right before your eyes!
- Video- Intro to Facility and Resource Management;
- Step 1: Creating Service Categories and Target Recovery %; and
- Cost Recovery.