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How does project profitability work?

Project Profitability allows you to track your non-internal projects’ performance to review how profitable they are. Project Profitability also helps you better manage team members and review how time and expenses are being tracked to help you make better business decisions.

 

Project Profitability features like capacity, cost rates, project estimates, project expense markup and profitability reports are only available for Premium and Select plans.

 

 

Capacity

Capacity is the number of billable hours your team members are expected to work for your business on a weekly basis. This is used to calculate the utilization rate on the Team Utilization report.

Set your team member’s capacity with these steps:

  1. Select the My Team section
  2. Then select any accepted team member
  3. Next, under Team Member Settings, select Capacity
    Team Member profile with capacity setting selected.
  4. 40:00 hours / week is the default, edit this to change the number of hours to any number no higher than 168:00
    Capacity option with a field to fill out.
  5. Select Done and then select Save to finish.

 

Note: Capacity can only be set up to a maximum of 168 hours per week.

 

Cost Rates

Team Cost Rates are how much you pay your team members for the work they do. By managing the cost of each of your team members, you’ll be able to review time costs for each of your projects to measure project profitability.

Team cost rates are separate from your Team Member Rates which is used for rebilling the team member’s time to a client on an invoice.

Setting your team member’s cost rate can be done from either of these two areas:

Team Member profile with cost rate setting selected.

  • Select the My Team section, then select a Team Member and select Set Cost Rate
  • Select the Projects section, edit or create a Project, and select Set Cost Rate


Set Cost Rates

Set Cost Rates section with fields to fill out.

  • Once a cost rate is entered in either My Team or in a Project, this becomes the new default for that team member
  • To update the cost rate for all past time entries, ensure Apply to all time entries is checked off when updating the cost rate
  • Select See Past Cost Rates to view previous cost rates for a team member

 

Project Estimates

Use a project's Estimate Type and choose between Total Hours or Hours Per Service to compare the hours logged against the amount specified. In your project overview, select the Services sub-tab, and depending on which project estimate type is selected, you will find either: 

  • Total Hours - The total hours for each service tracked is displayed with a grand total at the bottom

    Services list for a Project with total hours displayed next to each service.

  • Hours Per Service - Percentage to budget is displayed along with the estimated and actual hours tracked for each service

    Services list for a Project with budget percentages, estimated hours and total hours listed next to each service.

 

Project Expense Markup

A percentage markup can be added automatically for all expenses associated to a project. To set the expense markup, use these steps while editing or creating a new project: 

Set Expense Markup section on new project creation screen.

  1. Select the Projects section
  2. Either select: 
    1. Any existing Project, then the Edit button
    2. Or select the Create New... button and create a project
  3. Under Settings, select Set Expense Markup
  4. In the field next to % of expense grand total, enter the percentage you want to mark up
  5. Select Done
  6. Continue editing the rest of your project as needed, then select Save to finish. The markup will now be used on all new expenses assigned to that project moving forward.

 

To assign an expense to a project and mark it up, use the steps in How do I rebill expenses? here.

 

Notes: 

  • The percentage markup will apply the next time you create an Expense assigned to this Project
  • Rebilling the Expense back to a Client on an Invoice is optional, meaning you can have both non-billable and billable Project-related Expenses

 

Profitability Graph

The profitability graph can be accessed with these steps:

  1. Select the Projects section
  2. Then select a Project
  3. Next, select the Profitability tab next to Hours Logged.

Project overview showing profitability graph.

The Profitability graph will show you the below:

  • Billed - Includes all billed Income (all draft, sent, viewed and paid invoices and flat rate projects) and also displays any unbilled Income beneath (flat Rate projects, unbilled time entries and expenses), sales taxes are excluded except for any rebilled expenses that may have had sales taxes added to them
  • Costs - Includes all your team members’ costs (time tracked multiplied by cost rate), and expense costs (billed, unbilled and non-billable expenses, not including markup), sales taxes are excluded
  • Profit - The resulting total after subtracting costs from income
  • Profit Margin - Calculated as ((Income - Cost) / Income) * 100%), if there is no income but there are costs, the Profit Margin is - % instead

 

Reports

As part of Project Profitability, these additional reports help you keep track of which projects are profitable: 

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