When using the time and material method, you bill clients based on the time your team worked on their projects, ensuring that clients are billed accurately for the resources invested. However, as your business grows, managing profits and finances can become challenging without proper planning and tracking. 

Rocketlane simplifies financial planning and tracking by calculating revenue, cost, profit, and margin for you.

Planned financial numbers 

With Rocketlane, you can plan your projects by allocating time for team members under resource management and setting up rate cards for the project. Using the allocated hours and bill rates, Rocketlane will forecast the revenue for the project. We will use this resource allocation plan alongside cost rates of team members to forecast cost, profit and margin for your projects.

1. Planned Revenue

This is the potential revenue you can generate from the project based on your resource allocation plan.

Planned Revenue = Sum of all (Allocated time * Bill rates for the roles)

2. Planned Cost

This is the potential cost you will incur on the project based on your resource allocation plan.

Planned Cost = Sum of all (Allocated time * Cost rates for the team members)

3. Planned Profit

This is the potential profit you will make on the project.

Planned Profit = Planned Revenue - Planned Cost

4. Planned Profit Margin

This is the potential margin you will make on the project. 

Planned Profit Margin (%) = Planned Profit / Planned Revenue * 100

Actual financial numbers 

As your team tracks hours in timesheets, based on the rate card used on the project, Rocketlane calculates the revenue you are making on the project in real time. We also calculate the overall cost incurred on the project, based on the cost rates set for team members or roles. 

1. Revenue

The actual revenue you are making on the project. 

Revenue = Sum of all (Tracked time * Bill rates for the roles)

2. Cost

The actual cost incurred on the project.

Cost = Sum of all (Tracked time * Cost rates for the team members)

3. Profit

The actual profit you are making on the project.

Profit = Revenue - Cost

4. Profit Margin

The actual profit margin for the project. Tracking the profit margin helps you monitor the profitability of the project throughout its duration.

Margin (%) = Profit / Revenue * 100

To get an overview of the Financials Dashboard for Time and Material projects, click here.