How to use Price&Cost?
Price&Cost follows a common principle in project management when it comes to project cost management.
Your project budget would be calculated based on the costs you incur plus any margin. There are different Billing types - Time & Materials, Fixed Price, etc. and we support them all. But in all the cases you will have 3 elements to your project financials:
- Internal Cost
- Profit Margin
Price&Cost helps you figure out where you are on these 3 metrics as your project progresses and allows you to make calculated, informed decisions to keep your project on track.
Below is the workflow of Price&Cost:
1. Create draft estimate
- List the resources (people materials, costs) and their internal cost and client prices/rates.
- Enter the estimated effort (per week or per day) for People on projects and quantity for Materials.
- We'll be showing you the total Budget, Internal Cost and Profit as you are adding resources to your project.
Learn how to create your project estimate
2. Refine your estimate
- Refine your estimate when you have more insight into the work ahead.
- Save it as a new version and we'll retain your initial estimate, so you can always go back if needed.
- See how the metrics changed compared to your original estimate.
Learn how to create alternative project estimates
3. Refine your estimate even further
Maybe you've found a way to involve less resource, but make them full-time and it bumps your margin up? We can help you figure it out!
- Create more versions of the estimate with an alternative team composition, different cost, etc.
- We will show you how each version compares to the original estimate.
4. Create a baseline and start tracking
Once your estimate is finalised and the project budget has been signed-off - it's time to start tracking the project.
- Mark your project as started.
- This creates your baseline for Budget, Internal Cost and Profit.
- Since the project just started - all the your planned effort will happen in the future - so it's your Forecast.
5. Update your actuals
Now that your project is in progress - people are spending time and materials are being used on the project.
- Periodically, create a new version and log the actual spend for the past week (or day) - these are your Actuals. You can automate this process with our integrations.
- Occasionally, you forget to include something in your estimates. If this spend has happened - add it into your Actuals even if it wasn't in your original estimate.
- We will show you how your Budget, Internal Cost and Profit at completion compare to those in your original estimate.
6. Keep updating actuals and refining forecast
Repeat this exercise on a regular basis:
- update your Actuals for every previous period based on the data you have (if you do time-sheets - you are in luck!).
- Your plans may have changed since you've created your baseline - refine your Forecast accordingly, so you know how it will affect your final Budget, Internal cost or Profit.
- This allows you to steer your project back on track and avoid nasty surprises.
7. Monitor your project key metrics
This way you can track your project's financial health from the start of the project to its completion. Easily follow how you metrics change either via a Version roadmap or handy Version graph.
Now that you are familiar with how Price&Cost works, it's time to create your first estimate.