Time and money are the two main factors of success for any business. Inaccuracy that can be negligible for a freelancer turns out into significant losses for a large team, so setting up an efficient cost tracking process is essential. Keeping your time and billing records together provides you with accurate reports and streamlines your accounting. You always can generate detailed invoices for your clients and keep track of projects profitability. Today, we’ll explain how to set up cost tracking in actiTIME – and save your time and efforts.
1. Control the Costs
Managing costs requires the information on both payable and billable amounts at hand – and here’s where actiTIME helps. In actiTIME, you can set up:
- Cost of work rates for your employees;
- Billing rates for work your company’s employees perform.
This allows accounting managers to monitor and manage both revenue and costs. Using one tool to calculate payroll and billable amounts also helps business owners analyze the revenue to cost ratio and optimize workflow to get rid of cost-inefficient activities.
2. Track Work Cost of Your Employees
In case you have hourly employees on your team, you can manage their wages with actiTIME in a streamlined way:
- Set the individual cost of work rates, overtime rates and time off rates for every worker.
- Then, actiTIME will calculate their wages automatically based on the number of hours tracked.
- Once employee timesheets are filled and the time for payroll has come, you can simply run the Cost of Work report and see how much money you need to pay to every team member and how many staff-related costs your business has incurred over a selected period.
For your salaried staff, use the Time Balance and Overtime report to track the work time they’re actually spending and compare it to scheduled hours. You can use and see their work time balances in their View Time-Track charts.
3. Set Up Billing Calculations
actiTIME automatically calculates how much money your customers owe you for the completed work. First, you need to set up billing rates for specific activities (types of work) that your employees perform. Then, associate them with tasks, and actiTIME will automatically calculate amounts billable to your customers for work performed for them. To bill customers, you can also use the built-in invoicing tool to issue invoices with accumulated amounts directly in actiTIME.
Often, there are non-billable activities in the workflow. This applies to internal works, routine tasks, and not customer- or project-specific activities. You can set up both billable and non-billable types of work, and track time to tasks associated with them – this will help avoid complicated calculations.
4. Review Project Profitability
To understand how profitable your project is, you need to compare your billable amounts to costs of work, and it’s easy to do so by running the Profit / Loss report in actiTIME.
This report presents the data on revenues and expenses related to specific customers, projects or tasks. Besides, it lets you perform a detailed analysis of your project profitability by including employees’ overtime and leave time data into the picture.
This report helps figure out inefficient activities and parts of work, reveal the most expensive parts and see where there’s room for improvement and optimization.
5. Automate Overtime Accounting
Overtime is paid at a different rate. You can set up your overtime rates in actiTIME in User Settings, and select the way overtime should be recorded.
Overtime cost of work can be set in users’ profiles, and overtime addition is reflected in the Cost of Work report.
For those who are not entitled to overtime payments, you can disable overtime calculation. Their work time entries will be calculated as regular time.
6. Track Absence Costs
actiTIME allows to calculate the costs of different types of absences such as vacation, sick leave, time off etc., and significantly saves accountants’ time. Later, you’ll be able to see these costs in the Cost of Work report after selecting this option in the report configuration.
Summary
Managing costs together with timesheet records provides you a very accurate picture of your business two of the most valuable resources and facilitates accounting. actiTIME’s custom reports based on your time logs and cost rates are the indispensable tool for business owners, managers, and accountants to streamline the work processes and increase profitability.
