Net realisation

Net realisation is cash collected divided by the value of time recorded at standard rates, which equals billing realisation times collection realisation. A firm at 88 and 95 has net realisation of 83.6 percent. It is the figure that reaches the partners and the one to put beside the standard rate on every rate discussion.

How it is computed

Cash collected divided by the value of time recorded at standard rates, which equals billing realisation times collection realisation.

Example

Billing realisation of 88 percent and collection realisation of 95 percent give net realisation of 83.6 percent.

Where it goes wrong

Only one of the two quoted, usually the higher.