SQUAVA wants to help you see and understand how a project is ACTUALLY performing financially. Are you actually making money on a project? Are you losing money? SQUAVA now answers that question, right where you work in real time. Our Project Financial (cost/profit) Widget comes right into your Budget and Project Management pages to help you see the projected and actual performance of your project. The Project financial widget calculates either budget or revenue (on your project budget or project management page respectively), actual costs, and projected or real profit. Awesome right?!
|Best Practice Suggestion:|
|Because SQUAVA can uniquely track individual employee’s cost, time, and rates, you now have the ability to keep billings and costs specifically attributed to individuals. This has tremendous value to you as a firm to better understand your business - which is really billing for people’s time, even though you might bill lump sum (you’re selling a product or deliverable created by the efforts of professionals/staff). And, based on how effectively they work and are billed for their efforts, you make or lose money. This is further complicated for professional services businesses because you are likely working on multiple projects during a given time period (we might call this a cost period) which can make it harder to discern which ones went well and which ones perhaps went poorly. SQUAVA solves this problem and provides actual costs and profit on each project to allow you to monitor financials as you manage the project.|
Budget Financial Widget
Revenue Financial Widget
The Project Financial Widget is available with the project budgets you create and on your project management summary view. To view the Project Budget Financial Widget, open a project and select the Budget toggle button found at the top of the page and open a budget if one isn't already open. To view the Project Revenue Financial Widget, click the Management toggle button and select the Project Management Summary tab.
Budget Financial Widget
On the project Budget page, you will see the planned budget (labor and directs), the estimated costs (based on the staff and expenses assigned to the project), and potential profit for the job.
To view the breakdown and summary details of the Budget, click on Budget in the widget. The detailed breakdown is visible by clicking on Budget.
- Labor - This is a calculation of the potential revenue associated with the labor efforts planned for the project and should match the Labor Total from your budget. This is based on the hours and billing rates assigned to each staff member or the budget amount defined for the tasks on the project.
- Expenses - This calculation is your "planned" expense amount and should match the total expenses below in your budget. This number will include any markup you apply to direct expenses.
The Cost includes all the related costs planned for the project, both labor and expense. The detailed breakdown of the cost is visible by clicking on Cost.
- Labor - This is calculated with the "raw" labor cost or the hourly (or salary equivalent) rate of the employees time that was budgeted for the project.
- For example, an employee with a salary of $52,000, or one with an hourly pay rate of $25.00 an hour (also the hourly equivalent of the $52,000 salary) is budgeted for 10 hours, the labor cost would equal $250.00.
- Note: If you do not enter staff hours in the budget, SQUAVA is not able to calculate a projected cost for the effort. Consequently, you will not see a Profit estimate.
- Overhead - An employee's cost is not only a raw hourly rate (in most instances), but also includes a component of overhead that contributes to the actual cost of that employee. This is a percentage or factor of the raw cost that accounts for associated labor costs like fringe benefits (health insurance, etc.) or General & Administrative (rent, computers, software, etc.) costs. This amount is defined on the Company Overhead screen accessed here: Financial > Overhead Rate or quickly accessed by clicking on the number link in the widget. Contact us for more information about how to accurately calculate what that overhead rate should be.
- For example, a company may have an overhead rate of 120% of raw labor costs. To continue our example, the employee with an hourly rate of $25.00 and 10 hours on the project, would have an overhead amount of $300.00 ($250 x 120%). As a result, this employee's total cost would be $550 for 10 hours of work.
- Expenses - This is the total of the planned cost of the expenses. This amount does not include any markup on expenses listed in your budget.
This is the projected project profit based on the assumptions of the budget and its related costs. The labor and expense breakdown is visibly by clicking on Profit.
Revenue Financial Widget
In contrast to the Budget Widget, the Revenue Financial Widget on the Project Management Summary page will display "actual" financial details relating to a specific project’s revenue, costs, and profit. This actual and real-time financial data provides insights into project performance to help guide proactive corrections to project efforts to help assure money is actually made performing projects.
This is the total value of billed and worked labor and expenses to date. This includes the amounts that have been invoiced and the amounts worked (labor) or spent (expenses) to date that need to be invoiced (shown in the Current column.
The Cost includes all labor and expense related costs of the project.
- Labor - This is calculated with the "raw" labor cost or the hourly (or salary equivalent) rate of the employees time multiplied by the hours charged to the project. As the tool-tip (?) indicates when you hover on it, this Labor includes all the time charged to this project that has contributed to the Revenue (Billed and Current amounts) as well as the time charged to the project during the proposal stage (unbilled labor shown in the table near the bottom left of the page) and any time that has been banked or written-off (shown in the table at the bottom right of the page). The values in these tables show the ‘Billable Value’ of the time - this widget calculates and includes the actual cost of that time.
- Overhead - This is a percentage or factor of the raw cost that accounts for associated labor costs like fringe benefits (health insurance, etc.) or General & Administrative (rent, computers, software, etc.) costs. This amount is defined on the Company Overhead screen accessed here: Financial > Overhead Rate or quickly accessed by clicking on the number link in the widget. Contact us for more information about how to accurately calculate what that overhead rate should be.
- Expenses - This is the cost of the expenses that have been assigned to this project.
This is the actual project profit based on the what has been charged or assigned to this project. The labor and expense breakdown is visible by clicking on Profit.
You have successfully learned the benefit of using the Project Financial Widget! Can't find what you're looking for? Try the main knowledge base search at https://support.squava.com. If you’re still unable to find what you're looking for, give us a call, submit a request ticket, or send us a chat message.