You can choose the Fixed price budgeting type if your project has a pre-determined budget.
Within the Profitability info, which can be found in the Project info, you can keep track of your Budget, Spent so far, Income, Cost and Profit.
- First of all, set the internal hourly rate (more on this topic) by going over to the People section, where you can see everyone's hourly rates,
- Clicking ''Not set'' pops up the Change Rates and Capacity Dialog. In this case, Mike Johnson's internal rate is set to 10 USD/h.
- Let's create a Project with the following elements:
- Choose Fixed price project and set it to $500,
- Then choose if the tracked time and expenses will be billable or non-billable, along with who gets to change the billing status, the Owner and Project Leader or all users,
- A Design job type with an hourly rate set at 20 USD/h.
- Now that both rates are set, we can move on to tracking time records, and in our case, 1 hour of "Design" has been added.
- We have also added a fixed Expense amount of $100 (billable) and $50 (non-billable).
Finally, let's focus on the Project info to check the current status. This is where the following will be displayed:
Budget: 500 USD
Spent: 120 USD (1h x 20 USD/h + 100 USD billable expense)
Income: 500 USD (always the same as the budget)
Cost: 60 USD (1h x 10 USD/h + 50 USD non-billable expense)
Profit: 440 USD (500 USD - 60 USD)
NOTE: This data can be seen by Owner and Member+ (with the option to work with invoices and estimates) users only.
The Profitability info consists of the following elements (in detail):
Budget: The amount you have set as fixed price (budget) i.e. the amount you will charge your client.
Spent: Percentage of the utilization of the budget. The calculation is based on all billable hours and billable expenses.
Spent = [(Billable Hours * Job Type Hourly Rate) + Billable Expenses]
Income: The same amount as the defined budget.
Cost: Your project's internal costs. (For example, your employee's wage)
Cost = [(All Tracked Hours (both billable and non-billable) * Employee's Internal Hourly Rate) + Non-Billable Expenses]
Profit: The difference between Income and Cost.
Profit = [Income - Cost]
Last, but not least, an invoice can be issued based on a project's fixed price budgeting type. Learn more here: Issuing Invoices.
NOTE: if internal rate is not set for one of the users and time record submitted, the system will let you know by presenting the notification in red within the Project info/Profitability section).
Note: Profitability info and internal hourly rates are part of Get Paid Bundle.