Re: True Consulting Cost/Benefit

From: wbrethour (wbrethour_at_discussions.microsoft.com)
Date: 10/06/04 

Date: Wed, 6 Oct 2004 14:51:04 -0700

Thanks for your suggestions and the question was not to be used for billing
to a client but just for internal usage to measure profitability of
individual projects. In fact most of our client projects where we will be
billing for the resourse is done on a fixed price anyway but there are some
that are time and material and those are the ones that (internally) I would
like to track the profitability of a given project. For those time and
material billable projects I know what all resources cost per hour (salary
plus benefits) and I know what the billable rate to the client is based on
the signed contract. I was just looking for a place to enter the resources
salaries and have it factored into the cost of the projects for internal use
and not for billing use.

My comments on different rates based on the time of day was nothing more
then standard vs overtime rates for any given task based on work time of day.
 

"Steve House [MVP]" wrote:

> There are several problems. First of all Project does not do a very good
> job of tracking revenues, it's more oriented towards monitoring your
> internal costs. You can see this in the organization of the Rate Tables
> where you can have up to 5 different rate schedules for the resource costs
> and choose which applies to a specific task from the assignment information
> page in the usage views but there's no field for billing rate at all.
>
> You can kludge together some revenue figures through the use of the user
> defined cost fields but I'd be very careful what I used them for and would
> never use them to actually bill the client.
>
> Secondly, the revenues are more closely associated with the tasks than they
> are resources. While you can always record a billing rate for a resource,
> using it to calculate the amount X hours of work should be billed at is a
> bit more dicey as work is a task value while rate is a resource value and
> you generally can't mix them in the same formula. On the task level, OTOH,
> you can record your billing rate for that type of work in one of the
> user-defined cost fields and then multiply it by the work hours in a second
> field. I'm not sure billing rate even should be associated with the
> resource - as I said in another message, if I'm the client and am paying
> your firm to wax 100 widgets, the fact that one of your widget waxers gets
> $35 an hour and another gets $25 an hour is not my concern. As the client
> all I care about is getting 100 widgets waxed and I'm going to expect to pay
> the same for those widgets regardless of who you send over to do the waxing.
> I'm going to be thinking I'm booking XX hours waxing widgets and widget
> waxing is worth $YY per hour, period. As long as the work itself is of
> equal quality and takes the same time to accomplish, I could care less who
> you send to do it and your staffing decisions shouldn't affect the rate you
> charge me.
>
> Even with internal costs, Project has no way to vary the rate based on time
> of day. Work is either standard, taking place during the working time
> calendar, or overtime, taking place outside the working time calendar.
> That's about to only distinction it can make on its own.
>
> I knowe this isn't a lot of help but hopefully it'll give you points to
> ponder.
>
>
> --
> Steve House [MVP]
> MS Project Trainer/Consultant
> Visit http://www.mvps.org/project/faqs.htm for the FAQs
>
>
>
>
>
>
> "wbrethour" <wbrethour@discussions.microsoft.com> wrote in message
> news:31D77CC6-B136-44BD-9011-CD502152F655@microsoft.com...
> > Is there anyway I can take a human resource and do two different things
> > with
> > it. First I want to enter a billable rate to be charged to a client for
> > that
> > resource and secondly I want to enter the salary for that resource that I
> > would have to pay as an expense for having that resource on the project.
> > I
> > know I can do one or the other but I would like to be able to do both. I
> > have thought of entering the difference of the two and only reflect the
> > profit gained by using the resource but I would like to not always have to
> > do
> > that. The salary would be a fixed varible that would change but once a
> > year
> > where the billable would change based on task and time of day. Any
> > suggestions with this?
>
>
>

Relevant Pages

  • Re: Resources = Rates
    ... man-hours directly billed to the client, or we have a fixed price project in ... track both cost and billing rate in regards to labor in order to be able to ... Project's cost calculations are aimed ... certain fixed amount per day regardless of the amount of time the resource ...
    (microsoft.public.project)
  • Re: Tracking Costs & Billables in 1 Project
    ... While you can enter up to 5 tables of rates for a resource, they really are there to allow for the fact hat some people get paid differently rates on the specifc job they're doing at the moment. ... So you can't have one table that holds internal cost rates and another table that holds external billing rates and have them both in effect on the same task so you can calculate margins etc. Trying to go down that road will be an excercise in futility. ... So far, it seems to me that the easiest way to do this is to maintain 2 X MPP files w/ 1 representing internal costs, and 1 representing external billables. ...
    (microsoft.public.project)
  • Re: True Consulting Cost/Benefit
    ... > I'm confused - you say you're looking for a place to enter the resource ... > gets totalled in the cost tables already. ... this can give you total client ... > billing and your total internal costs for each resource but it won't give ...
    (microsoft.public.project)
  • Re: Multiple rates for resources across projects
    ... When you double click on an assignment in either the Task Usage view or the Resource Usage view, you can select which of the resource's rate table should apply to that particular task. ... It is exactly this issue that leads me to often say the MSP should NOT be used for client billings! ... You pay him $75 per hour on your payroll - you might bill his services to your clients at $100 to $150 per hour depending on the client and the project but Project is not the proper tool to use to track those billings and rates. ... Project allows 5 different cost rates per resource. ...
    (microsoft.public.project)
  • Re: Help using MSP to effectively calculate costs and manage a project
    ... the cost to you of one man-hour of that resource. ... What you charge the ... client may not even be based on man-hours of labour at all - you might ... situation where the resource hours are counted twice. ...
    (microsoft.public.project)