Setting up your financial controls

How to set up your financial controls

Updated over a week ago

Edition: Business, Enterprise

User-level: Director, System Administrator

Previous steps: NA

Synergy has a default set of standard financial settings which are used for calculation controls in the project financials reporting. It is important to set up your company's own financial controls at the start of using Synergy to achieve accurate project reporting. Consider seeking advice from an accountant when determining the figures to be used in financial controls.

The following settings are used to calculate the actual cost values in Synergy. Follow the steps below to set your financial controls:

1. Navigate to the Organisation drop down > Settings > Financial > Financial Controls

2. Click 'Update Financial Controls'

3. Set the organisation wide financial controls:

  • Overhead factor: The overhead factor is the cost of running office where the staff work. It is set up to cover the office costs when calculating actual cost and profit in Synergy. Some staff will have a cheaper overhead if they work in a remote office or from home. You can mark up/down the overhead factor at a staff record level to reflect that working in a remote office is cheaper than the primary office.

    The overhead factor allows you to determine the 'raw' cost of each staff member and how much it needs to be marked up by to cover the business overheads. The chargeable value set would then have the target margin % added on top of this figure to ensure that your organisation is making a profit.

    Overhead calculations

    The organisation overhead factor should be reviewed every six to twelve months. Updating the overhead factor will update all of the staff actual costs and charge-out rates 'standard cost per hour'.

    Step 1: Calculate the cost of billable work

    Before we can report on the cost of billable work you need to make sure the following items have already been entered in Synergy:

    1. Create staff records - All currently employed staff have been entered in Synergy.

    2. Enter staff salaries - The staff salary details must have been entered on each staff record in Synergy.

    3. Set the 'utilisation' factor - Update the default utilization factor for any non-billable staff. i.e. Administration type staff are normally set to 0% as they never complete billable work. This needs to be changed on the staff record level to be different from the organisation default defined here in financial controls.

    Tip: Learn more about creating and updating staff records.

    The table below shows the list of staff that are currently employed at the organization 'Fabrikam'. The salary type selected for each staff member is not important here, and their salaries are all summed as a 'package' (salary per year + extras + retirement / pension fund).

    The utilization percentage varies for each staff member based on the type of work that they complete. In the table below Billy-Bob is set to 0% utilization as he is an administrative staff member, and he never completes any billable work. Other staff below also have lower utilization factors if they have other internal office tasks to complete along with their billable work.

    Formula: (Package $ x Utilisation %) = Cost of billable work

    The formula above is calculated for each staff member currently employed. The 'cost of billable work' for each staff member is then summed and taken to step 2.

    Step 2: Calculating the overhead factor

    Two figures are required to calculate the overhead factor. The first figure is the 'annual practice cost (excluding profit)' and this cost is normally obtained from your accountant. This value includes all staff salary package values (utilised and non-utilised staff salaries - all staff), and costs for operating an office like rent, phones, computers, insurances etc.

    The accountant will obtain this value from the profit and loss statement, and the value represents "total expense for the practice - any expense reimbursable from clients". This means that any expenses that are on-charged to clients via the projects are excluded from the overall running costs of the business, as you will recover the money for these expenses via the project invoicing in Synergy.

    The second figure required is the 'total cost for all staff to complete billable work' (utilised work) which was worked out in step 1.

    Formula: Overhead factor = 'annual practice costs' / 'annual total cost for staff billable work'.

    The result of this example is an overhead factor of 2.53. This value can be entered into Synergy financial controls, or you can enter another value that has been suggested by your accountant. In many organisations, the overhead factor is set up to be between 1.8 to 2.5. The practice overhead is rounded up to 2 decimal places.


    Annual Practice costs - $2,000,000

    Annual total cost for staff billable work - $791,453.73

    Practice Overhead = 2.53

    What is the overhead factor for?

    The overhead factor is used to show by what factor do the 'costs' have to be uplifted by in order to recover the organisation overheads.


    • Staff 'Jill Lockhart' costs = $30 per hour

    • Organisation overhead factor = 2.53

    • Minimum charge out for Jill Lockhart (without profit markup) = $75.90
      $30 x 2.53 = $75.90

    The actual cost in projects

    • When Jill is charged out at $90 per hour, an actual profit of $14.10 is recorded per hour against the project. ($90 - $75.90 = $14.10 profit)

    • If a transaction for Jill is written off, then there will be a loss recorded of $75.90 against the project.
      *This feature is available with the Synergy Business or Enterprise products. *

  • Target margin: The target margin is the profit margin goal above the break-even point that the organization plans to achieve after the overhead and costs have been taken into account. The target margin will also calculate a standard cost based on the nominated charge-out rate less target margin.

    Tip: If the change is 'future dated' using the effective date (e.g. the effective date is tomorrow), then you will not see an update of the Overhead (OH) cost on the staff record until that future date (e.g. tomorrow).

4. Set the 'staff record' level standard values that will default onto each new staff record created in Synergy. These defaults can be changed on the staff record once created if required.

  • Hours per week - The standard number of hours per week that staff are expected to be working.

  • Retirement fund % - The standard retirement fund percentage for new staff. e.g. Percentage for a Superannuation fund (Aus), Kiwi Saver (NZ), pension (UK) and on-costs (USA). *This feature is available with the Synergy Business or Enterprise products.*

  • Availability factor - The percentage of time each staff member is available to be in the office, less any annual/holiday leave, public holidays, medical/sick leave, and any other leave types that apply. *This feature is available with the Synergy Business or enterprise products. *
    Availability calculation

    The week's availability needs to be calculated here to determine the availability factor. This is the total weeks per year less the number of leave weeks per year.

    The availability factor can then be calculated as the ((Weeks available per year / Weeks per year) x100). This is then the default availability to be applied to new full time or equivalent (FTE) staff records that are created in Synergy. This availability factor can be changed on the staff record when required to be different from the default setting.

  • Utilisation factor - The percentage of time a staff member should be working on billable tasks. *This feature is available with the Synergy Business or Enterprise products. *

You have now set your organisation's financial controls - make sure to adjust them at the staff member level if necessary.


New effective date

When updating any of the organization-wide financial settings an effective date must be entered. The effective date is the start date for when these new financial controls rules will be applied in Synergy. The organization-wide settings that use the effective date are: 'overhead factor' and 'target margin'. The effective date entered must be after the last entered timesheet or expense. Type the required effective date or select it from the drop-down calendar shown.


Rollback is used to restore a previous set of financial control rules, which are controlled by the effective date field. This allows you to restore a previous set of organization-wide financial controls, when changes to the 'overhead factor' or 'target margin' have been made by mistake.

  1. Go to: Settings > Financial > Financial controls.

  2. Check the organization-wide financial controls for 'target margin' and ' overhead factor' If the values in the top table are incorrect, then review the top row in the history table. The top row is the group of settings that will be restored by the rollback option.

  3. To roll back to the top row group of settings click the ellipses button in the top right and select rollback.

  4. The fields at the top of the screen are refreshed to show the old settings reapplied. The changes are made to re-apply the old history row to both the staff and organization-wide settings.

Where to next?

What other features does this relate to?

Did this answer your question?