What do you get from Cronforce?

tEREUy1vSfuSu8LzTop3_IMG_2538Many clients ask us to summarise what our application does. Our answer is: Cronforce is Time management app that controls your project budget and tracks your time. With Cronforce, you’ll have answers to questions like:

 

1) How much time are you spending on projects?

Cronforce makes it easy to track time from anywhere. You can log hours from the web, desktop, or mobile. There’s no excuse not to track, and you’ll have the data you need to bill accurately and budget wisely.

2) Are you going over budget?

Set a budget and keep tabs on progress with Cronforce’s built-in reporting. You’ll know before a project goes over budget so you can plan ahead with the team and the client.

3) Are your projects profitable?

Look back at your projects and compare billable vs. non-billable hours, cost and billable budgets per month and in total. See which ones were the most profitable and which ones cost you. With Cronforce you can even track the profitability of each resource type on a project.

Start fresh with a 30-day trial!

The Cronforce.com Team

You are Losing Money – Part III – How much do I make per project?

In our last article we talked about how to calculate cost rates and billable rates. The next set of important questions to answer is:

  • How much do I make per project?
  • How do I ensure I do not run over budget?

The best way to keep an eye on your revenues and profits is by tracking in real-time what your employees are working on. When they work on billable projects and the billable rate is above the cost rate, then you make a profit. The cost can go up when your team members are booking on internal projects which normally have a cost component only. These could be either billable units such as programmers working on a product that one day can turn into a commercial success, or non-billable units such as HR and admin staff.

When you run a sizeable business, using Excel spreadsheets quickly becomes a NO GO. This is why we developed Cronforce – it gives you real-time overview of how your budget is being spent. But also provides insights into your profitability per project and resource type.

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A valuable function of real time tracking of your budgets is that you can immediately spot when you start spending more on a project than intended. This is especially up-to-date nowadays because business is dealing with increasingly thin margins and budgets require particularly strong scrutiny.

The Cronforce.com Team

You are Losing Money – Part II – Calculating cost rates and billable rates

When it comes to budget control management software, you want answers to the following questions:

  • What is my fully loaded cost per resource?
  • What should be my billable rate?
  • How much do I make per project?
  • How do I ensure I do not run over budget?

We have already provided the components forming your fully loaded cost (FLC). Now find here few tips how to connect all these parameters and calculate your FLC.

  • You want to ultimately come to the cost per hour or day for your resources. To achieve this you need to get the cost per month divided by workdays.
  • Workdays vary by country and industry so get the right number. If you do not know it there are plenty of such calendars in the internet so ask Google.
  • Extract vacations and sick days and you will come to the actual workdays of your employees. Then divide this number by 12 to get the actual workdays per month.
  • Normally salaries vary based on seniority. If possible organize your resources in tiers based on seniority in order to have few lines of FLC for your resources. Otherwise could become a very long list of people, and believe me, this will be a nightmare to make any sense of.
  • Get the average amount per month considering total pay for the year including bonus.
  • Take into account social and health insurance per resource.
  • Consider any release costs and add it to the estimated amount per month.
  • Do not forget to estimate recruitment costs for your employees, especially if you use external provider that charges you a flat fee. Alternatively count the time that your employees spend to interview candidates until you select one e.g. one out five candidates make it and it takes you two hours each, then consider 10 hours of cost (if non-billable) or billable rate for this person.
  • Same for HR and admin services – consider the time spent on payroll, evaluations etc.
  • Take your rent and divide it by the people. If your employee number changes, just calculate your cost per sq.m and consider that on average you need to have around 5 sq.m. per person.
  • Extract training costs per resource. Normally this is budgeted per unit so should be easy to plug into your formula.
  • Account for equipment and furniture – laptops, monitors, adapters, desks, chairs.

Once you have extracted all costs and know the actual workdays, a simple division will give you the cost per day, and a further division by working hours e.g. 8 h a day, the FLC hourly rate.

Now, how to calculate the billable rate?

Well, obviously you cannot bill less than FLC but there are actually more costs to consider like management salaries, marketing, cost of sales etc. This is then cost plus pricing. But this is a truly complex topic and it should be defined based on your company strategy, target industry, product etc. In any case, it is generally not a good idea to price under your cost. 🙂

Stay tuned – in our next article next week we will address the last set of questions and namely:

  • How much do I make per project?
  • How do I ensure I do not run over budget?

The Cronforce.com Team