A cost represents the cost of doing a consulting business. Common business expenses include wages, salaries, bonuses, equipment, software, materials, travel, etc. The significant costs in the consulting business are the salaries of consultants.
Cost should be planned for the future and measured according to the present. Segmentation can help clarify the following:
- Who are the highest and lowest paid employees?
- What is the labor cost per employee?
- How big are our overhead costs?
There are multiple types of expenses in Metric.ai:
Recognized cost is calculated from worked hours logged by employees during the selected period, employee cost rates and expenses entered for the project.
Recognized Cost = Logged Hours * Employee Cost Rate + Expenses Cost
Tip: If you want to add a one-time expense for something internal for any of your group (office, department, company, client, role, or a custom group like partners), create an internal project and input any spendings via the project’s Expenses section.
Planned cost comes from Allocations (can be imported from a resource scheduling tool like Float via integration or internal resource allocation functionality in Metric.ai) and their costs which are calculated via cost rates of employees scheduled in the future.
Planned Cost = Planned Hours * Employee Cost Rate + Expenses Cost
Forecasted cost consists of recognized (logged) cost for today and planned cost after today.
Forecasted Cost = Forecasted Hours * Employee Cost Rate + Expenses Cost
In Metric.ai there is a separate metric view for the Cost per hour. It’s used to determine how much money an organization or a given expert or team is spending on a per-hour basis.
Hourly metrics help to evaluate your hourly rates and overall financial performance.
To learn more about the analytics view of Metric.ai, please read Analytics overview help documentation.