How does Project Profitability work?
Project Profitability allows you to track your Projects’ performance to see how profitable they are. Project Profitability also helps you better manage team members and see how time and expenses are being tracked to help you make better business decisions.
Team 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 see 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 Rates can be done from either of these two areas:
- Go to the My Team section, then click on a Team Member and click on Set Rates
- Go to the Projects section, edit or create a Project, and click on Set Cost Rates
Once a Cost Rate is entered, this is used on all Projects, and updating a Cost Rate will only apply to all time entries on active Projects only moving forward.
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:
- Go to the Projects section
- Either click on:
- Any existing Project, then the Edit button
- Or click on the Create New... button and create a Project
- Under Settings, click on Set Expense Markup
- In the field next to % of expense grand total, enter the percentage you want to mark up
- Click Done
- Continue editing the rest of your Project as needed, then click 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 here.
- 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
The Profitability graph can be accessed with these steps:
- Click on the Projects section
- Then click on a Project
- Next, click on the Profitability tab next to Hours Logged.
The Profitability graph will show you the below:
- Income - Includes all billed Income (all Draft, Sent, Viewed and Paid Invoices and Flat Rate Projects) and all unbilled Income (Flat Rate Projects, unbilled Time Entries and Expenses)
- 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)
- 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
You can also review Profitability on each specific Time Entry by running a Time Entry Details Report.