You are Losing Money – Part I – Components building your cost rates

When it comes to budget control management software, you may question, “Why should my company implement a budgeting and cost control tool when my accounting team can perform the same tasks?”

Well, you may have heard that there is difference between financial accounting and business accounting. So let us look at the difference first and then we will delve into what can go wrong.

Financial accounting

Financial accounting is required by regulation or law and follows a strict set of accounting standards that all accountants must apply to the financial records of the organization. In the U.S., accountants adhere to the rules of the accounting principles (GAAP). The rest of the world uses the International Financial Reporting Standards (IFRS) for financial accounting. With the use of established accounting standards regulators, tax authorities and investors have a straightforward basis for comparison in understanding and benchmarking company financial records.

Business accounting (also called managerial accounting) is focused on the needs of the business rather than aligning with external accounting standards. Business managers usually use it to produce a significant amount of projections and models, and is used to help management in decision-making and performance evaluation. Business accounting is not a must and rarely used in smaller organisations but always present in larger ones.

One of the major tasks in business accounting is understanding your cost structure in order to be able to price your good or services.

Fully loaded cost

So, how much does an hour of work in your company cost? Not an easy question to answer as you have different salaries, benefits etc. By definition fully loaded cost should comprise from variable and fixed costs, distributed fairly across resources.

In order to be able to calculate with your financial model you need to gather following information:

  • Employee salary – be it weekly, monthly or yearly
  • Bonus
  • Release costs
  • Social security
  • Health insurance
  • Office costs – mainly rent, office food
  • Equipment costs – lapop, monitor, adapters, desk, chair
  • HR costs – supervesion, evaluations
  • Recruitment costs – how much time it cost to recruit a person e.g. how many hours or fees to recruitment agencies
  • Incidental costs – company events etc.
  • Vacation days
  • Approximate sick days per year for the company

Once you got all this information we can move to calculating your fully loaded cost rate. This is a topic we address in our second article.

The Cronforce.com Team

7 Leaders that Save us Costly Mistakes with their Wisdom about Life & Business

Each month we introduce you to some influential and thoughtful leaders on Twitter with the last publication being 7 Project Management experts. As a company obsessed with how to control the spend of your hard-earned money and ensure you don’t lose sight of costs, sometimes is good to look at the broader pictureThis is why we won’t talk about project cost management solution or about how to track time efficiently. This time it is going to be about some of the most powerful management influencers as recognised by LinkedIn. Here’s the list of 10 personae who you might not know yet, but you should totally read, listen and follow.

#1 Brian de Haaff – CEO, Aha!

Who: Brian writes about personal and company growth and the adventure of living a meaningful life.  He finds inspiration and new ideas everywhere and all the time.

Why: Brian has topped the writers column about management and culture at LinkedIn. He did it with articles such as: Why this CEO will never hire another Salesperson and How smart Bosses manipulate Employees.

#2 Justin Bariso – Founder, INSIGHT

Who: Justin writes weekly on the topics of leadership, communication, and how you can find valuable business lessons…well, pretty much everywhere. How he measures success in writing: “If I inspire others to think, I’ve been successful. Of course, it’s nice if my writing helps pay the bills as well.”

Why: His most-popular post is Starbucks’ CEO Sent a Remarkable Email to Employees Yesterday. Here Are 2 Takeaways. One takeaway: “If you see an opportunity, pounce on it. Think it through, but don’t overanalyze”.

#3 Carson Tate – Founder, Working Simply

Who: Carson writes about productivity strategies that can help individuals work simply and live fully, whether that means reducing sloppy emails, improving daily planning — or just making time for adult recess. Most proud of writing What burning out taught me about prioritizing my work.

Why: Likes writing because: “I shared a very personal moment in my own journey to find simplicity and balance. I heard from numerous readers who shared their own struggles … it was humbling and inspiring.” Her favorite comment on a post: “As we mature, we realize that many things are important but not equally important. Prioritize based on your values. The strongest person at the negotiating table is the one who can stand up and walk away.”

#4 Dustin McKissen – CEO & founder, McKissen + Company

Who: He writes about the intersection of our personal and professional lives. That includes articles on topics such as the time he had to fire his brother; what he learned while living and sleeping in his car; and how he discovered that he couldn’t “work” his way through the emotions surrounding his mother’s death.

What: He is most proud of his article The Amazing Skillset of a Stay-at-Home Parent.

#5 Suzy Welch – Co-author, The Real Life MBA

Who: She covers: “The good, the bad, the ugly, the uncomfortable, the complicated, the crazy, and the wonderful of getting ahead…or put another way, the here’s-how-it-really-works of career management.”.

Why: Most-popular post: Three (Unprofessional) Ways to Get Ahead at Work. Her favorite interview question: “What did you do to prepare for this interview?” Why she likes it: “It offers, I think, an ‘a-ha!’ for both parties in the interview process — the person doing the questioning, and the candidate him or herself.”

#6 Louis D. Lo Praeste – Global business consultant, Quodfatum

Who: He writes about political and social commentary, about the times we live in, the economy, and what more enlightened leadership might look like. He says: “I’m controversial at times, funny I think, and generally very blunt.”

Why: Post he’s proudest of: “An Open Letter to my Fellow Men struck a cord with a lot people because I took on sexual harassment from the male perspective.”. Morning habit: “I take a hot towel from the water I heat to make pour-over coffee and wipe the sleep from my eyes and face, read the Economist Espresso briefs, drink my coffee and write at least 1500 words. Everyday. Sometimes it’s rubbish, sometimes it’s decent. Try the towel method; it’s very refreshing.”

#7 Gary Frisch – Founder, Swordfish Communications

Who: Corporate scandals and the responses to them. Recent controversies he analyzed: Why Volkswagen’s apology fell so flat; why the recent Starbucks’ red cup outrage was more like a Christmas gift.

Why: Favorite post: Why Olive Garden Has Earned My Loyalty. Why he likes it: “It highlighted something positive about a popular company … and so rarely do I get to use the phrase ‘I feared the other tortellini was going to drop.'” How he comes up with story ideas: “Easy, I follow the news media. There’s never a shortage of topics and companies crying out for some Monday-morning quarterbacking.”

Hope you like it! And keep in mind – always feel free to contact us at support@cronforce.com if you need any help.

The Cronforce.com Team

UIX improvements in Timesheets

We are relentless in releasing improvements to our current timesheets interface and adding new features for our clients. After adding tasks with commentscopying of projects, Jira add-on and many more, so now comes the next improvement. Not surprisingly it is in Submit Timesheet in Timesheets section where we now show the weekly total hours per project, per day and altogether. Here is an example how it looks:

Submit timesheet in Timesheets - now with total hours per week, per project and per day

Hope you like it! But you probably wonder what comes next? Well, it will be something you have asked us already and related to Timeoffs. Please feel free to contact us at support@cronforce.com if you need any help.

The Cronforce.com Team

Great news! Timesheets and cost control now in German

Guten Tag!

We are very excited to announce the release of our German version of the Cronforce cloud application. If the administrator of the system has configured German as default language you will get German language when you log in. If you want to switch it to your preferred language just click on your profile picture in the header, select language and save your changes.

Language selection

Herzlich willkommen!

The Cronforce.com Team