When reviewing project financials, it is crucial to understand the numbers and where they come from. Project Financials > Overview contains a wealth of financial detail about your project that can be viewed as the overall project's Totals or broken down into Details. Learn how Forecast helps you track financials in your Time & Material (T&M) projects.
This article includes:
- Understanding Tooltips
- T&M Revenue calculations
- T&M Cost calculations
- T&M Profit calculations
- T&M Margin calculations
- Particularities of Expenses
- Related articles
Understanding Tooltips
Tooltips provide the calculation used behind the values displayed in Financials > Overview. Hover over the table headers to display the tooltip and view the value calculation.
A project's Financials > Overview offers two display options, Days or Months (default). Use the dropdown at the top left to select the desired display.
T&M Revenue calculations
All revenue calculations in a T&M project depend on the rate card assigned to the project. Check out Configuring your rate cards and Managing rate cards in projects for more information on working with rate cards.
Planned Revenue
- Planned Revenue is the estimated scope of your project. It is calculated using billable task estimates, rate and price of planned expenses.
- Planned Billable Expenses are expenses planned on a project that will be billed to the client. Therefore, the price of billable expenses planned for the future are part of planned revenue.
Example (without expenses)
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- Estimate on a billable task = 8h
- Role assigned to task = Developer
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Rate of a Developer = $200
- Planned Revenue = 8h * $200 = $1600
Actual Revenue
- Actual Revenue is defined as the earned value of the project, or the value of the work you and your team have put into the project. It is calculated using Time registered, rate and price of past expenses.
- If a team member registers time on a billable task, the time registered is multiplied by the rate that is associated to the role for person who has registered the time.
- Past expenses are the expenses within a project, dated prior to current date that are billed to the client. Therefore, the price of billable expenses that occurred in the past are part of actual revenue.
Example (without expenses)
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- Time registered = 10h
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Rate of the role = $150
- Actual Revenue = 10h * $150 = $1500
Forecast Revenue to Complete
- Forecast to Complete is defined as the remaining revenue expected for the balance of the project. Its calculated using Remaining time on unfinished billable tasks, Rate and Price on future Expenses.
- The remaining time on a task is the difference between the task estimate and billable time entries. Remaining time on tasks cannot be negative.
- Future expenses are expenses planned on a project, dated ahead of the current date that will be billed to the client. Therefore, the price of future expenses are part of forecasted revenue.
Example (without expenses)
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- Remaining time on an unfinished billable task = 4h
- Role assigned to task = Developer
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Rate of a Developer = $200
- Forecast to Complete = 4h * $200 = $800
Total Revenue at Completion
- Total at Completion is defined as the expected total revenue to be earned by the project upon completion. It is calculated using Actual Billable Time and expenses and Forecast Billable Time and expenses to complete.
- Price of past and future expenses are included.
Example (without expenses)
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- Actual Billable Time and expenses = $1500
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Forecast Billable Time and expenses to complete = $800
- Total at Completion = $1500 + $800 = $2300
T&M Cost calculations
Cost calculations in a T&M project depend on the internal hourly cost assigned to resources and the cost of expenses. To learn more check out, About Internal Hourly Cost and how it works and Understanding Expense Items.
Planned Cost
- Planned Cost is defined as the total spend expected in order to complete a project. It is calculated using Billable Task Estimates, Internal Cost and Cost of planned expenses.
- Planned Billable Expenses are expenses planned on a project that will be billed to the client. Therefore, the cost of billable expenses planned for the future are part of planned cost.
Example (without expenses)
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- Total estimated time on tasks (all assigned to person A) = 60h
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Internal hourly cost of person A = $20
- Planned Cost = 60h * $20 = $1,200
Actual Cost
- Actual Cost is defined as the total spent on your project to date. It is calculated using Time registered, Internal hourly cost and Cost of past expenses.
- Past expenses are the expenses within a project, dated prior to current date that are billed to the client. Therefore, the cost of billable expenses that occurred in the past are part of actual cost
Example (without expenses)
-
- Total time registrations (all by person A) = 50h
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Internal hourly cost of person A = $20
- Actual Cost = 50h * $20 = $1.000
Forecast Cost to Complete
- Forecast to Complete is defined as the amount of cost expected at the end of the project. It is calculated as Remaining time on unfinished tasks, Internal hourly cost and Cost of future expenses.
- Future expenses are expenses planned on a project, dated ahead of the current date that will be billed to the client. Therefore, the cost of future expenses are part of forecasted cost
Example (without expenses):
-
- Total remaining time on tasks (all assigned to person A) = 30h
-
Internal hourly cost of person A = $20
- Forecast to Complete = 30h * $20 = $600
Total Cost at Completion
- Total at Completion is defined as the expected total cost of the project when it is completed. It is calculated using Actual Cost and Forecast Cost to Complete.
- Cost of past and future expenses are included
Example (without expenses)
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- Actual Cost = $1.000
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Forecast Cost to Complete = $600
- Total cost at completion = $1.600
T&M Profit calculations
Profit calculations in a T&M project depend on the rates and internal costs associated with your resources and the price and cost of project expenses. For more information check out Configuring your rate cards, Managing rate cards in projects, About Internal Hourly Cost and how it works and Understanding Expense Items.
Planned Profit
- Planned Profit is defined as the difference between planned revenue and planned cost. It is calculated using Planned Billable Time and Planned Cost
Example (without expenses)
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- Planned Revenue = $1.600
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Planned Cost = $1,200
- Planned Profit = $400
Actual Profit
- Actual Profit is defined as the difference between actual revenue and actual cost. It is calculated using Actual Billable Time and expenses spent to date and Actual Cost.
Example (without expenses)
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- Actual Revenue = $1,500
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Actual Cost = $1,000
- Actual Profit = $500
Forecast Profit to Complete
- Forecast to Complete is defined as the difference between remaining revenue and remaining cost of a project. It is calculated using Forecast Billable Time and expenses to complete and Forecast Cost to Complete.
Example (without expenses)
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- Forecast Billable Time and expenses to complete = $800
-
Forecast Cost to Complete = $600
- Forecast to Complete = $200
Total Profit at Completion
- Total at Completion is defined as the total profit expected when the project is completed. It is calculated using Total Billable Time at completion and Total cost at completion.
Example (without expenses)
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- Total Billable Time at completion = $2300
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Total cost at completion = $1600
- Total at Completion = $700
T&M Margin calculations
- Margin is defined as the percentage revenue remaining after all costs and expenses are deducted.
Planned Margin
Actual Margin
Forecast to Complete Margin
Total at Completion Margin
Particularities of Expenses
Expenses in revenue calculations
Expenses referenced in T&M calculations are defined as follows:
- Planned Expenses: Expenses included in a project's scope.
- Future Expenses: Planned expenses dated ahead of the current date
- Past Expenses: Actual expenses dated prior to the current date.
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