Where project planning and performance measurement are based on budgeted hours, a simple timesheet system can capture actual effort and estimates to complete be entered by the project manager. However, where costs need to be measured in monetary terms then the hours booked must have appropriate rates applied, as must the planned hours for cost budgeting.
Rates management can be quite complex, particularly where billable rates need to be handled. Innate’s resource management software provides effective support for project costing.
Most internal departments manage cost rates by associating staff with a relevant grade or role and storing rates accordingly. This avoids the need for the software to maintain more confidential personal cost rates. Standard cost rates are often reviewed annually, based on median salaries and overhead allowances.
Billable rates need to be much more versatile, particularly where the work is for external clients. For time and material contracts, where the billing will be based on hours booked on the timesheet, each project can have different rates negotiated and these could be role based as well.
Role based billable rates require the system to know what role each person is acting as, for each time element booked. For example, John Smith may book time on a project when he is acting as a project manager or a tester. The rate for project manager time is likely to be different from that as a tester.
This is often referred to as activity based costing. Rates can also change over time and such changes need to be stored so that the correct rate is always applied.
Innate software provides comprehensive rates management for project costing and billable work. Any number of rate tables can be handled, so that billable rates can be specific to each project, if required.
Activity based costing enables billable rates to be specified at task level and also by role; should an individual undertake various tasks with different billable rates, the appropriate rate will be applied. We do this by defining that person’s role for specific tasks.
Innate’s rates management enables the appropriate cost and/or billable rates to be applied to both the booked and planned hours, so that:
- Cost performance and profitability can be measured across projects, tasks and teams.
- Billable amounts can be computed for internal or external invoicing.
- A detailed history of departmental, grade and rate changes can be tracked for each individual, so that costs will be accurately allocated over time.
Where data is used for billing, or is fed into payroll or other systems, a secure timesheets system automates the process and gives a comprehensive audit trail. This improves reliability, accuracy and operational efficiency.
Project costing converts booked or planned hours into monetary values. Innate resource management software provides project costing.