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 Project Management experts on Twitter you need to follow

Last month we introduced you to some influential and must-check-out-and-draw-insight-from productivity and time management gurus on Twitter. But as you know, Cronforce also targets project management, providing you with an extensive project cost management solution.

Which means that yes, we monitor the project management industry. You can also bet that we have some favorites among the people who make things happen there. Here’s our list of 7 project management personae who you might not know yet, but you should totally read, listen and follow.

Some important Twitter project management accounts to follow with Cronforce.

#1 Jurgen Appelo @jurgenappelo

Who: Jurgen has one of the catchiest Twitter descriptions ever. What matters more, however, is his motivation to spearhead revolution in company structure when it comes to management.

Why: We didn’t find Jurgen on Twitter, actually. What we came across was one of his Forbes articles – “Managing in failure mode”. Concise and punchy, it resonated with us. Jurgen is a regular contributor at Forbes and you can check his other pieces here.

#2 Pawel Brodzinski @pawelbrodzinski

Who: Pawel is the leader of Lunar Logic where magical web apps get brewed and clients are left utterly satisfied. But he also has another side to him: the whiteboard junkie.

Why: We came across Pawel’s awesome presentation on Kanban theory. It’s great and you should watch it and draw some very important conclusions after doing so. Remember that we’re Kanban fans too?

#3 Elizabeth Harrin @pm4girls

Who: Elizabeth is pure class and reveals the world of project management from a professional’s perspective. Her insights are easy-going, yet you can truly see how much of a pro she is.

Why: Whichever article you grab off her website will be some time spent well. What we had a lot of fun with upon discovering her project management was (and still is!) her monthly “What I’m reading” series. You can check it out here and see her literary critic side too. We can be bookworms too! 🙂

#4 Bob Sutton @workmatters

Who: It’s fairly hard to describe Bob Sutton in just a few words. You just have to witness his thought process and read a few pieces and you’ll understand why we have trouble putting our impression into words. His Twitter description summarizes “Stanford Professor who studies organizations”, but he’s way more than that.

Why: There’s a distinctive elegance in members of highly established academia who write on business topics (such as project management). It’s like a revelation of sorts. You can check why on Sutton’s website or simply read his “Trust the Evidence, not your Instincts” article written together with Jeffrey Pfeffer. Lots of workplace-related tips and insight that can be of use to any employee…and any business of any scale.

#5 Susanne Madsen @SusanneMadsen

Who: Susanne has worked with jaw-dropping companies like Philips, ExxonMobil, Expedia and Citigroup. Not to mention academia such as Kingston University or Regent’s University. There’s a lot to be learned from her insight on project management, leadership and other crucial angles to getting things done.

Why: Her blog is a goldmine. Susanne’s article on working with remote teams hits all the right spots and gives some precious tips and advice. Cronforce is targeted at remote teams that want to improve their project management/communication so we know the remote team drill well enough.

The last two Twitter accounts we want to mention aren’t “people”, but they are run by distinguished professionals. In a way, contemporary project management wouldn’t be the same without them.

#6 Project Management Institute @PMInstitute

Who: PMI’s concept is clear: that’s the single most prestiguous membership association of project managers all over the world. Think of it as the ultimate project management treasure vault. A must for anyone interested in the industry.

Why: We don’t think there’s any reason to clarify why you would do well to check out PMI’s Twitter account. Just do it and be in touch with everything project management related.

#7 Atlassian JIRA @JIRA

Who: JIRA is the key to amazing software team management. From Kanban boards to Agile reports and a myriad of other features, we can’t recommend it enough.

Why: If your software team needs an intelligent, functional way to shoot projects and get stuff done flawlessly… That’s JIRA for you. What’s even better is combining JIRA with Cronforce (we’ve got a brilliant JIRA time tracking integration for that). This way you get double the opportunities and project management gets a ridiculously easy task. Your team will love you.

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

How to grow your company by 60%? Ask the experts!

Companies face challenges every day. Achieving company growth by increasing productivity and ROI are the most crucial ones. So the 1 billion dollar question for most is: how do you grow your company?

how to grow your company

In business you cannot get away from the tons of spreadsheets. At the same time, the gazillion spreadsheets used across all departments can become really frustrating and increase complexity. The impact of this directly impacts your company growth as it reduces your company agility. So what do you do then?

Latest research by IQMS shows that using proper ERP software provides such results as the following:

  • Support growth by 60% without additional labor resources
  • Cut month-end close time as much as 75%;
  • Reduce maintenance costs more than 70%;
  • Improve accounting and financial management;
  • Improve accountability across the enterprise;
  • Improve internal and customer communications;

We can help you implement a proper solution for your business processes. Talk to us and schedule a free consultation with our analysts and developers!

The Cronforce.com Team

3 Mistakes Small Business Owners Make When It Comes To Project Cost Management

Ah, project cost management. One of the most dreaded things for business owners alike, no matter their location or the size of their business. Nobody likes costs. Nobody likes gauging costs either.

Yet you have no choice than track them (or at least try your best to do so), if you want to have your business operating as intended. Otherwise, you risk a soon-to-be sinking ship scenario.

With that said, a lot of people underestimate tracking their costs and setting a steady schedule to calculate and implement an extensive, properly formulated project cost management strategy. A huge case in mind are the numerous startups that come with the era of digitalization we live in. Mostly tech-related, they consist of amazing web developers or designers… who sadly lack the perspective of calculating and tracking their costs.

It might be a bit harsh, but the startup and small business scenes are really full of people who are careless of their budgeting. Yet when they fail, they blame it on something else. We’ve seen such cases and as you might guess, this was a motivation to include a project cost management tool in Cronforce.

But where are the pitfalls when it comes to project management – and the costs contained therein?

You Think “Costs” Is a Monolithic Term

Far too many people seem to think that costs are just costs, making no distinction between different types of expenses. Of course, there’s a great variety here: some small businesses or medium-size companies extensively rely on a specific type of costs, yet are low on other expenditures of another type.

getting worried

What’s guaranteed is that you have overhead costs. These are the expenses that have to deal with advertising, rent, taxes, bills (electricity, phone), various utilities, fees (insurance, legal, accounting and other services). Like it or not, you’ll have some of these. This holds true especially for brick-and-mortar businesses tending to accumulate a lot of overhead due to building expenses (mainly rent). Cloud-based startups and Software as a Service (SaaS) ventures at least have it a bit lighter here, though web-based overheads can be cruel too.

Along with overheads, you’ll have various direct costs, fixed costs or variable costs. For example, direct costs are related to your actual product – when you sell it, what are the expenses it involves? Perhaps the shipping? No sale means no expenses in the case of direct costs. That doesn’t mean that you can get lighter on your overall project cost management practices, though.

The most important thing here is to start having an “all costs are not the same” mindset. Gauge your business and identify what type of costs you rely most on.

You Don’t Calculate Your Costs Properly

Feeling guilty as charged a bit? Don’t worry – lots of companies (especially small businesses) seem to mess up their expense management. After all, that’s why business consultants and project cost management tools and software exist.

However, a great chunk of companies don’t even identify that problem in order to seek a solution to repair the faulty financial pipeline at hand.

Before even starting a project, you should calculate all your costs immediately. What is, for example, your overhead cost per hour? What are the overhead costs related to various departments (if you have them, of course)? How much is your revenue and how are you currently allocating it? Who needs it the most? Have you actually set your product’s/service’s price to guarantee some juicy profits despite your overhead costs’ level?

office night frustration

Approach your business’ expenditures in a smart manner and from various viewpoints so as to gauge the financial situation to the optimum.

You Don’t Keep a Regular Track on Your Costs

Doing business is an extremely intensive thing to take part in. Variables are a constant here. Markets change, competitors come and go, customers’ preferences shift like crazy. What was once a fixed cost scenario can easily get shaky and need some tweaking. All of this especially holds true for eCommerce and tech-related small businesses/startups.

That’s why you need to always be in touch with what’s happening to your costs and all variables surrounding them. Not to mention that it’s about discipline – if you skip a week or two, it’s easier to fall into a downward spiral and ditch it for a long time. And then at the end of the year you’re left wondering what the hell happened and why your initial financial forecast didn’t turn out as planned.

Tweak your costs. Play around with your overheads. Be a dynamic swimmer, not a lethargic floater.

Project Cost Management Made Easy

Keeping a small business or even a medium-size company is a daunting task. It’s so demanding and requires of you to juggle so many things at once that sometimes the costs switch in your head might just shut down. We’re all human, after all.

That’s why we came up with a project cost management tool that you can utilize to become a flexible, functional and all-around efficient software sidekick of yours. What’s in the bag? Well, we:

  • Make it easier for you to set up budgets and rates
  • By providing you with a transparent, simple way to track your costs
  • In real time, on the go
  • With plenty convenient integrations with services such as QuickBooks or Paychex

What do you say about giving it a try for free and getting those costs settled once and for all? We reinvent project cost management tools. You draw the benefits.