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# Time & Material Budget Calculations

## Learn how the financial numbers are calculated in the budget page of your Time & Material projects.

### Main takeaways

To monitor you project financials it is crucial to understand which numbers to focus on and where they come from. Find out how Forecast helps you to track your financials in your Time & Material projects.

You can also always check how the numbers on the budget page are calculated by hovering over the table headers which will display tool tips with all calculations. ### Time & Material Project Revenue

Please note that all revenue calculations in your Time & Material project are depending on the rate card that is associated with the project. Learn more about how to set up your rate cards here and how to associate them to your projects here.

#### Actual Revenue Project Totals

The actual revenue is defined as the earned value of the project, that means it is the value of the work you and your team have already put into the project.

In your Time & Material project the actual revenue is calculated based on the time registrations on billable tasks and the rate card assigned to the project.

If one of your team members registers time on a billable task in your T&M project the time registered will be multiplied by the rate that is associated to the role of the person who has registered the time.

Example (without actual billable expenses):

Time registered = 10h, rate of the role = \$150

Actual revenue = 10h * \$150 = \$1500

In addition to that the expenses are taken into account. The actual billable expenses are the expenses that occurred in your project and you are billing to your client. Therefore the price of the billable expenses that occurred in the past are part of your actual revenue.

Work Details Tables

The same formula is used to calculate the actual revenue in the work details tables on the budget page of your T&M project.

The actual revenue for a time period (day, week or month) is the time registrations on billable tasks in this time period times the rate assigned to the role of the person who registers the time.

#### Plan Revenue Project Totals

The planned revenue is calculated based on the estimates on billable tasks in your scope and the rate card plus all planned billable expenses.

The estimate of the billable tasks in your scope will be multiplied by the rate associated to the roles that are assigned to the tasks.

Example (without planned billable expenses):

Estimate on a billable task = 8h, role assigned to a task = Developer, rate of a Developer = \$200

Planned revenue = 8h * \$200 = \$1600

In addition to that the expenses are taken into account. The planned billable expense are the expenses that where planned for your project and you are billing to your client. Therefore the price of the billable expenses that occurred in the past or are planned for the future are part of your planned revenue.

Work Details Tables

The same formula is used to calculate the planned revenue in the work details tables on the budget page of your T&M project.

The planned revenue for a time period (day, week or month) is the estimated time on billable tasks that are planned for this time period times the rate assigned to the role that is assigned to the task.

#### Remaining Revenue

Project Totals The total remaining revenue on your T&M project displays the revenue that you can still expect to earn until the end of the project. Its calculated looking at the remaining hours on the billable tasks in your project and the rate card associated with the project. The remaining time on a task is automatically calculated by subtracting the time entries from the estimate, however it can never be negative but just reaches zero.

Example (without planned billable expenses):

Remaining on a billable task = 4h, role assigned to a task = Developer, rate of a Developer = \$200

Remaining revenue = 4h * \$200 = \$800

Work Details Tables

The same formula is used to calculate the remaining revenue in the work details tables on the budget page of your T&M project.

The remaining revenue for a time period (day, week or month) is the remaining time on billable tasks that are planned for this time period times the rate assigned to the role that is assigned to the task.

#### Forecast Revenue

Project Totals Forecast revenue takes the actual and the remaining revenue into account.

It shows you a forecast of your project financials taking into account the current situation in your project (actual revenue) and then looks into the future with the remaining revenue.

In the beginning of a project your Forecast revenue will equal the Planned revenue. If time registrations exceed the estimate or tasks are completed with less hours than estimated, the Forecast will differ from your Plan and show you a more accurate outcome of the project.

Work Details Tables

The same formula is used to calculate the forecast revenue in the work detail tables on the budget page of your T&M project.

To forecast the revenue for a time period in your T&M project the sum of your actual revenue and your remaining revenue in this time period is calculated.

### Time & Material Project Cost

#### Actual Cost Project Totals

To calculate the actual cost of a project all time entries, the internal hourly cost of your team members and all cost on actual expenses is taken into account.

The actual cost of your project is calculated by multiplying each time registration in the project with the internal hourly cost of the team member who registered the time. In addition to that the cost of all actual expenses is added to the cost.

Example (without expenses):

Total time registrations (all by person A) = 50h, internal hourly cost of person A = \$20

Actual cost = 50h * \$20 = \$1.000

Work Details Tables

The same formula is used to calculate the actual cost for one time period of the project (day, week, month) that is displayed in the work details tables.

It only takes into account the time registrations that occurred in the specific time period.

#### Plan Cost Project Totals

The calculation of the planned cost of your project takes the total estimate, the internal hourly cost of your team members and the cost of your planned expenses into account.

To calculate the planned cost the total estimate of your project is multiplied by the internal hourly costs of the team members that are assigned to the tasks. We are looking at the planned data on the scoping page of your project. We are also taking into account the cost of your planned expenses.

Example (without expenses):

Total estimated time on tasks (all assigned to person A) = 80h, internal hourly cost of person A = \$20

Planned cost = 80h * \$20 = \$1.600

Work Details Tables

The same formula is used to calculate the planned cost for one time period of the project (day, week, month) that is displayed in the work details tables.

It only takes into account the task estimates that were planned for the specific time period.

#### Remaining Cost Project Totals

The remaining cost on the project shows you how much cost you still have to expect until the end of the project. It is calculated based on the remaining time on your tasks, the internal hourly cost of your team members and the remaining expenses, i.e. all remaining cost items on your project.

Example (without expenses):

Total remaining time on tasks (all assigned to person A) = 30h, internal hourly cost of person A = \$20

Planned cost = 30h * \$20 = \$600

Work Details Tables

The same formula is used for the remaining cost in the work details table. When displaying the remaining cost for one specific time period (day, week, month) it will only take the remaining estimate of tasks that were planned for this period into account.

#### Forecast Cost Project Totals

The forecast cost is the expected total cost for your project. The calculation looks at your actual cost (based on you time registrations) and the remaining cost (based on the remaining time on your tasks).

It takes the current actual situation of your project (time registrations) and looks into the future with the remaining cost.

Example (without expenses):

Actual cost = \$1.000, Remaining cost = \$600

Forecast cost = \$1.600

If everything is going according to plan in your project and the time registrations on your project do not exceed or fall below the estimate, your forecast cost will equal your plan cost.

Work Details Tables

The same formula applies to the forecast cost in the work details tables. The forecast cost of one specific time period (day, week, month) is therefore the sum off actual cost and remaining cost of tasks in that time period.

### Time & Material Project Profit

#### Actual Profit Project Totals

The actual profit for T&M projects is calculated by subtracting the actual cost from the actual revenue.

This means the earned value of your project is reduced by the actual cost of the work your team members put into the project already.

Work Details Tables

The same formula applies to the actual profit in the work details tables. The actual profit of one specific time period (day, week, month) is therefore the difference between the actual revenue and the actual cost in this specific time period.

#### Plan Profit Project Totals

The plan profit for T&M projects shows you the profit you have planned for when setting up the project scope. It is the difference between your planned revenue and the planned cost of the project.

Work Details Tables

The same formula applies to the plan profit in the work details tables. The plan profit of one specific time period (day, week, month) is therefore the difference between the plan revenue and the plan cost in this specific time period.

#### Remaining Profit Project Totals

The remaining profit of your project is calculated by taking the remaining revenue and the remaining cost into account.

Work Details Tables

The same formula applies to the remaining profit in the work details tables. The remaining profit of one specific time period (day, week, month) is therefore the difference between the remaining revenue and the remaining cost in this specific time period.

#### Forecast Profit Project Totals

To calculate the forecast profit of your T&M projects we take into account the forecast revenue and the forecast cost.

This means that the calculation of the forecast profit takes the current actual revenue and cost situation into account and looks into the future by looking at the remaining revenue and cost of the project which is not completed yet.

Work Details Table

The same formula applies to the forecast profit in the work details tables. The forecast profit of one specific time period (day, week, month) is therefore the difference between the forecast revenue and the forecast cost in this specific time period.

### Particularities of Expenses

Expenses in revenue calculations

This is how the planned expenses are used in the revenue calculations of the project:

• Plan Revenue: Planned expenses = all past & future planned billable expenses
• Actual Revenue: Actual planned expenses = only past billable expenses
• Remaining Revenue: Remaining expenses = all future planned expenses
• Forecast Revenue: Forecast expenses = Actual expenses + Remaining expenses

### Related articles

Project Budget

Fixed Price Budget Calculations