Predict project costs using hours times rates.
The term "Project Costing" refers to estimating or discovering future project costs, both for the client and internal salaries. Certainly every project manager, executive, and project stakeholder wants to know these numbers before entering into a lengthy investment. Of course, they are just estimates, but hopefully good educated ones. They are numbers your company must put its trust in when considering future business.
Even clients need to know the cost for each project they send out to consulting or manufacturing firms. Those costs are generally estimated by the companies they do business with, using software just like this.
Since most costs are labor related, project costing is obtained by setting project billing rates for each employee on each project. Billing rates may be different for each project employees work on; these follow the rates your company has negotiated with each client. After you set these rates, all your project tasks will show the estimated cost based on duration. The cost values are calculated by multiplying rates times hours.
To get started, create a new project, and then some tasks to represent the job you'll be doing. After building a representative of the future job, you are ready to enter client and salary rates. See Tools, Billing Rates to do that. When finished, you can display the "Client rate" field along with "Cost client" and "Cost salary." in the Project Tasks tab.
Project task costing values will roll up to the sub-project and project level. This will let you see how much each segment of the project will cost. Plus, you'll see the full project cost.
All those project tasks will show up on the timesheet for employees to track time to. When they enter time into the timesheet, the "Cost client actual" field will begin to show values based on employee hours. The "Cost client remain" will also become available to see how much of the project is still remaining. Of course, the Percent Complete field shows the portion of the project that is finished.
The biggest challenge is to keep the project under budget. To do that, you can set the "Task % Error" value. This clamps off any new hours after a task reaches a specified maximum percentage. This is one of the few ways you can control run-away task hours.
Also see: Video: Future Billing Rates - Yearly Forecasts, Video: Overtime and Regular Time, Video: Client Billing and Billing Rates, Video: How to Bid a Project, Video: Project Wizard for Time Tracking