In this video we going to take a quick look at earned value. Earned value is actually a project management term that refers to the amount of money you’ve earned on a project as it proceeds; as you work on the project and put time towards it.
I’m going to click over on the project tasks tab; you see six tabs along the top here. The first one is project tasks and it allows you to create a project hierarchy with project tasks under summary tasks, very much like Microsoft Project. I’m going to get into a little of the project management stuff here but not too deeply. Here you see a project, I’m going to refer to this R0012 – R4 upgrade project. You can see we have a column for cost client and cost client actual. The cost client actual, to cut right to the point, is the earned value. This value is based upon the percent complete for each of the tasks under the project. We see a hierarchy of the project if I click on one of these + symbols then you’ll see that it expands and you see the other tasks underneath it. So I can collapse and expand these summary tasks to see the actual tasks but the point I want to get to is that you have a cost client and a cost client actual. The cost client is based on the projected duration of the task and the billing rates. And the cost client actual is based on actual time that has been entered into the timesheet which causes the percent complete on these tasks to increase. If I was to open up one of these, you can first of all see that these tasks are assigned to different users, but you’ll also see a percent complete value here. There’s an estimated duration, an estimated number of hours remaining and the actual work that has been completed on here is directly related to your earned value. So in other words you have earned money on this particular task as you’ve put time into the timesheet and that time then ends up being billed to the client or participating in the final completion of the project.
Let’s cancel out of here. We see these two columns here duration and actual work. If you go to the view menu and choose columns, turns out that you can add some other columns here related to costs, client rate, salary rate, things like that. Quite a few number of fields that are project management related. I had put the cost client and the cost client actual fields in this view.
Where do these numbers come from, these dollars figures? Well, those come from a client rate that you can type in. If I go to tools, projects, I see a list of my projects, click on this particular project that we’re looking at. We have a billing method, you can choose either user rates, which is the default, or category rates, or project rates. It depends on the model you’re using for billing your project. Salary method has a different calculation. Close out of this, go to the tools menu choose billing rates, you can either choose employee billing rates or category billing rates. Those are the methods you are using to type in your billing rates that effectively set these values here that you see. So this particular project is a $747,000 project, we’ve earned on it so far $672,000. That’s essentially the idea behind earned value in Standard Time®.