Missleading Explanation about Finantials

practice management
1

I am watching the finantial part Of PcM and found a fundamental error in the explanation of NOR in the video [Firm Financials: Profit-Loss Statement at 5:15 the video says: the NOR represents the Firm Gross Revenue and this statement had me confused and finally I debunked.

NOR DO NOT REPRESENT the firm GROSS REVENUE, these are two different finantial Terms:

Gross revenue : This is the total revenue generated from services or sales before any deductions.

And NOR Also known as Net Revenue, this is the revenue after subtracting:

  • Consultant fees (e.g., structural, MEP, landscape)
  • Reimbursable expenses passed through to the client.

This error in the video throw me out of understanding this to easily understand and calculate overhead rate, net multiplier, break-even rate**, and other financial performance metrics.

Does anyone have any opinion about this here ?

Thank you.

2

Hi @tou.dhda,

Thanks for your question! You are absolutely correct in your definition of NOR. The video states:

“The Net Operating Revenue, or NOR, represents the firm’s gross revenue (every dollar they’ve received) minus the fees they’ve paid to consultants and other non-reimbursable project fees.”

Was there something else that you were seeking clarity on here? We’re happy to help!

Kiara Galicinao, AIA, NCARB
Black Spectacles