How to track custom financial ratios for a client

Standard ratios answer standard questions. The question a client actually asks is usually narrower: how much of our sales goes on wages? What share of costs is the fleet? How much does the café really contribute? A Custom Ratio answers it with the client's own accounts, and it stays up to date as the ledger does.

Building a ratio

1. Open the ledger and go to Client Ledger Settings, then Custom Ratios.
2. Click New Custom Ratio and name it, such as Wages to Sales.
3. Under Accounts to measure, tick what you are measuring.
4. Under Measured against, tick what you are measuring it against.
5. Click Create Ratio. Press F11 to save and Alt+E to edit it later.

Either side can mix individual accounts with report totals from the Profit & Loss and Balance Sheet, such as Total Income or Net Assets. Each list filters as you type, shows the figures beside the accounts and can hide zero balances, with a running total underneath and Clear selection to start again.

Reading it

Each item you measured is shown as a share of the total you measured it against, with a Total row adding up the amounts and ratios and a pie chart beside them. Anything not selected shows as an Everything else slice, so the whole base is always in view. Percentages round to whole numbers, or untick that to see two decimal places. A ratio reads the ledger's latest financial year.

Putting it to work

• On the Dashboard. Add Widget lists your Custom Ratios, so a ratio can open with the ledger.
• In a report pack. Add it to a custom page and it prints in the PDF beside your commentary.
• In a client plan. If the plan is to bring wages down, the ratio is how you both see it working.

Ratios worth building first

• Wages against total income
• Rent against total income
• Motor vehicle costs against total expenses
• Each income stream against total income, to see which pays the bills

See it in the Custom Ratios how-to video.