Hunting for project revenues: billable hours

While evaluating projects for the entinre department or the entire business, we can assess their importance regarding the business revenues. With a pie chart showing billable hours per project, we can see which projects make the most of our revenues.

From this information, we might want to ask ourselves if it’s ok that one project repesents 25% of our revenues? Would we want to depend on that project? Or even on a client that represents such a big chunk of revenues?

We can build the same type of chart do display billable hours per client, and see, just like projects, if we are repending too much on a single client for our revenue.

Of course, this has nothing to do with income, since there are nos costs involved here. We could build a chart showing project billings or client billings, which might give us better insight on the diversity of our business.

What do you think? Which metric do you use to asses your company’s health? Is it a billable hours ratio? Revenues? Profits? Percentage of profits?

It doesn’t matter which metric you choose. It should be easily available whenever you need it. Any manager in your business shuld be able to know, when they need to, iof their business unit or their department is meeting performance targets. Abak allows professional service businesses to know, in real time, the health of their projects.

What’s the real cost for your billing system?

Sign of the Past Is This Abandoned Gasoline Pump with a Price of 29.9 Cents Per Gallon. The Cost of Fuel Has Made Such a Reoccurrence Nothing But a Dream. The Gas Pump Was Photographed at 04/1974

When shopping for a time and billling system, we tend to compare licence costs only, and we forget about the total cost of ownership for a solution.

Beyond paying for a software licence, we should also look at what is required for implementation, training, and hardware needs.

More than that, we should also look beyond the dollar costs and examine the time that needs to be invested in the new solution to make it operational. This is essential to compute the total cost of ownership. And wihtout the cost of onwership, it would be impossible for us to know the return on our investment.

Let’s look at Abak, for a team of 5:

  • Yearly licence, including accounting integration: $ 660
  • Training, 15 hours, web-based: $ 1400
  • Implementation: done during and between training session by the client themselves. The time required depends on the management choices made by the clients. It usually takes about 5 days of work (40 hours) to get Abak up and running. However, most of our clients don’t stop their business for a week or two to get their time and billing system implemented, they will do it part time, which can bring implementation delays upwards of one month.
  • Hardware and software: a basic windows workstation is fine for users, and windows server with Microsoft SQL Express will run Abak’s server.

As you can see, Abak’s hardware and software needs are on the light side. However, there is no skirting the implementation and configuration work. When choosing a time and billing, we should beware of solution providers that promise implementation within a few hours.

As for Abak, we prefer to present a realistic picture of the resources needed to get the most out of our time and billing system, rather than over promise and end up with unhappy customers.

What do you think?

Meet us Friday at CGA Montreal 2010 Conference!

CGA MTL banner

Montreal’s annual CGa meeting is the perfect opportunity to netowkr and keep your knowledge up to date.

This year, Abak is honored to be a sponsor of the event. We’ll be happy to chat with you at the event!

Montreal CGA 2010 Event, November 19, 2010, Montreal.

Time Is The Product, Profit Is The Goal

Woman aircraft worker, Vega Aircraft Corporation, Burbank, Calif. Shown checking electrical assemblies (LOC)It seems in manufacturing, business managers are used to having metrics like product line profitability, expected revenue from sales, breakeven points, and the like. In professional services businesses, the same performance metrics can still be obtained, if we use time (and billable time) as our product, and resources as our product lines.

As we can see in the table below, the metrics really are the same; it’s just the name that changes.

Manufacturing Professional Services
How much product was made.
Work in process
How many billable hours were worked.
Income by product line
How much profit was generated by sales of each product line.
Project/Client profitability
How much profit was generated by resources working on each project or for each client.
Budget control
How much spending is planned to produce each product line.
Budget control
How much work is expected to be done for each project.
Revenue by product line
How much revenue was brought in by sales of each product line.
Revenue by resource
How much revenue is generated by each person employed by the business.
Production line scheduling
Which product is planned for production, how much production time is available.
Resource utilization
Planned project assignments for each person employed by the business.

Meet us tomorrow at CGA Ontario Conference 2010!

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Abak is proud to sponsor this year’s CGA Ontario Conference 2010, held November 12, 2010.

CGA Ontario’s annual conference is the premier professional development event of the year. Conference 2010 is a “can’t miss” opportunity toadvance your skills, share your expertise and network with CGAs.

We’re looking forward to meeting you!

Resource Assignations: Who’s Doing What?

Row of Postal Clerks Processing MailScheduling resources for projects can easily become a nightmare. If a new client signs on with the business, it’s imperative that the manager be able to tell that client when the work will begin, and who is going to be in charge.

Resource assignment reports provide exactly that information. They show which resource is booked on which project, when they become available, and for how long. This is especially useful for resources that are in high demand, usually those that bring in the highest revenue.

Project Planned hours Sun
Resource A
Project A 40 8 8 8 8 8
Project B 16 8 8
Project C 0
Resource B
Project A 8 4 4
Project B 8 4 4
Project C 40 8 8 8 8 8
Resource C
Project A 0
Project B 48 8 8 8 4 4 8 8
Project C 0
Total 160   24 24 24 20 20     24 24

From the table above, we can see that Resource C is available for half-days on the 5th and the 6th. If we had a request for work, we could book Resource C for those two half-days. The table also shows that Resource A is working primarily on Project A.

Announcing November’s AbaKast: Reports!

Abak Software LogoAbaKast training sessions are webcasts for small groups of Abak users, where we’ll focus on a specific part of our time and billing software.

In November, we’ll talk about reports! Abak’s reporting engine is quite powerful and flexible. We can export information to PDF, Word, or Excel.

During November’s AbaKast session, we’ll explore how to create, customize and export reports from Abak. We’ll also cover our little-known but super-powerful feature, the pivot reports (formerly known as dashboards).

AbaKast 102: Efficient reporting

Tuesday, November 16
1h30 – 3h30pm, Eastern Time

Only 99$

Register here!

Become a master of reporting:

  • Standard reports
  • Custom reports
  • Parameters
  • Dashboard reporting

Revenue By Resource: Who’s Bringing In The Money?

Negro bus-boy dishwashers, Investment Pharmacy, Washington, ...In a business where time is the product and its value is based on the people in the team, it’s important to know how much revenue is created by each team member. It can be used as a performance objective given to the resources or department leaders. It can also be used as a critical business metric.

Revenue by resource is the sales figures for each team member. From this information, after subtracting the cost rate, one can get gross profit margins for each team member.

Knowing how much revenue is created by each team member is essential. Without this information, it becomes impossible to prioritize resource assignment and evaluate team performance.

Resource Work Billable Non-Billable Revenue
Resource A 40 40 0 4000.00
Resource B 65 40 25 4000.00
Resource C 56 20 36 2000.00
Resource D 60 0 60 0.00
Resource E 50 35 15 3500.00
Total 271 135 136 13 500.00

As we can see in the table above, the resource bringing in the most revenue is not the one working the most hours, but the one with the highest proportion of billable hours.