Resource Plan Cost Calculations

[Rae Ann Prasnic]

How are costs calculated for Resource Plans? That is the million dollar question. Hopefully this article will reveal some of the mystery. 

*Bookmark this article for future reference. 

There are three COSTS associated with a Resource Plan:

• Planned cost. Amount in Planned hours multiplied by the hourly rate. This is a first draft estimate of the Resource Plan cost.
• Confirmed/Allocated cost. Amount of confirmed or allocated hours multiplied by the hourly rate of the confirmed or allocated resources. Provides a more accurate estimation.
• Actual cost. Based on the Time Cards used for the Actual hours, calculated using the hourly rate of each user and the hours worked.

There are five ways to determine the hourly rate for those costs:

The hourly rate for resources can be based on several factors, including system configurations and values on your Resource Plan and/or Demand/Project. 

• Rate Override. If selected on the Resource Plan, the hourly rate specified in the Resource rate field is used. This is often used for contractors.
• Rate Model. If a Rate Model is populated on the Demand or Project to which the Resource Plan is associated, the Rate Model will be used.
• Individual Labor Rate*. If the Resource Plan is assigned to a specific user, and the Time Sheet Policy of the user is set for multiple rate types, the Planned Cost is determined using the Labor Rate Card with the default rate type.
• Resource Group Rate. An Hourly Rate can be added to the Resource Group as well.
• Default Labor Rate. If no Override, Rate Model, Individual Labor Rate Card or Resource Group Rate is identified, the default rate will be used. The default rate is configured in Cost > Administration > Properties (default is $50/hour). 

* Rate Model is new as of Madrid. Previously Labor Rate Cards were used. For more flexibility it is recommended to use Rate Models over Labor Rate Cards.

Note: If the hourly rate changes, the Resource Plan should be recalculated. 

Please comment if I'm missing something or there are errors. I will update the article appropriately. 

Rae Ann

Please mark reply as helpful or correct if applicable (I'm working on a badge!).

[Aditya24]

Hi Rae,

This article is really helpful. I have a scenario which I wanted to bring up.

I have created labor rate card for user based on their country. Now If I create a resource plan of type user then my planned and confirmed/allocated cost all comes same.

But when I create a resource plan of type Group and select the same user as above then the planned cost is taking the default rate of 50 and not the user rate.

Is this correct behavior? 

[umar44]

Your article provides a clear breakdown of the costs associated with a Resource Plan and outlines the various factors that can influence the hourly rate used in these calculations. Here are a few points to consider and potentially include in your article:

1. **Role-Based Rates:** In some cases, organizations may have different rates for different roles or positions. For example, a senior developer might have a higher hourly rate than a junior developer. If your resource planning system supports role-based rates, you might want to include that in your considerations.

2. **Currency Conversion:** If your organization operates in multiple regions with different currencies, it's important to consider how currency conversion is handled when calculating costs. This can add another layer of complexity to resource planning.

3. **Overtime Rates:** If your organization pays different rates for regular hours versus overtime hours, this should be factored into the calculations. Some projects may require overtime work, and it's essential to accurately reflect the associated costs.

4. **Billable vs. Non-billable Hours:** Depending on the nature of your projects, you might want to distinguish between billable and non-billable hours. Some resources may spend time on internal tasks that are not directly billable to clients, and the cost calculations should reflect this.

5. **Cost Contingencies:** Consider including a section on how contingencies or unexpected costs are handled in the Resource Plan. This could involve setting aside a certain percentage of the budget for unforeseen expenses.

6. **Integration with Time Tracking Tools:** If your organization uses time tracking tools to capture actual hours worked, it's important to ensure that these tools seamlessly integrate with the Resource Plan to provide accurate and real-time data for actual costs.

7. **Documentation of Changes:** Emphasize the importance of documenting any changes to the hourly rate or resource allocation, as this documentation can be crucial for future reference, audits, or analysis.

Your article already provides valuable insights, and these additional points can further enhance its comprehensiveness. It's evident that you've covered the basics well, and your readers will likely find this information helpful for understanding how costs are fife jammer in Resource Plans.                                                                                                                            https://fifejammers.uk/fife-jammers-dunfermline/

[umar44]

Your article provides a clear breakdown of the costs associated with a Resource Plan and outlines the various factors that can influence the hourly rate used in these calculations. Here are a few points to consider and potentially include in your article:

1. Role-Based Rates: In some cases, organizations may have different rates for different roles or positions. For example, a senior developer might have a higher hourly rate than a junior developer. If your resource planning system supports role-based rates, you might want to include that in your considerations.

2. Currency Conversion: If your organization operates in multiple regions with different currencies, it's important to consider how currency conversion is handled when calculating costs. This can add another layer of complexity to resource planning.

3. Overtime Rates: If your organization pays different rates for regular hours versus overtime hours, this should be factored into the calculations. Some projects may require overtime work, and it's essential to accurately reflect the associated costs.

4. Billable vs. Non-billable Hours: Depending on the nature of your projects, you might want to distinguish between billable and non-billable hours. Some resources may spend time on internal tasks that are not directly billable to clients, and the cost calculations should reflect this.

5. Cost Contingencies: Consider including a section on how contingencies or unexpected costs are handled in the Resource Plan. This could involve setting aside a certain percentage of the budget for unforeseen expenses.

6. Integration with Time Tracking Tools: If your organization uses time tracking tools to capture actual hours worked, it's important to ensure that these tools seamlessly integrate with the Resource Plan to provide accurate and real-time data for actual costs.

7. Documentation of Changes: Emphasize the importance of documenting any changes to the hourly rate or resource allocation, as this documentation can be crucial for future reference, audits, or analysis.

Your article already provides valuable insights, and these additional points can further enhance its comprehensiveness. It's evident that you've covered the basics well, and your readers will likely find this information helpful for understanding how costs are calculated  in Resource Plans.                                                                                                                            

[Anish Reghu]

This is an excellent article providing clear insights into the resource plan calculations. One can sit hours together on the Product documentation or go through this article to get themselves clear with what the fields are meant for. Well explained and thanks a lot!

Regards,

Anish

[SaurabGidwani]

@Rae Ann Prasnic How is a labor rate card is associated to an employee/user if the select multiple rate card is unchecked on TImesheet policy it is picking default from system property

[Anish Reghu]

@Saurabh Gidwani - Can you rephrase your question and please share screenshots of the checkbox you have referenced to above. Also share the proper navigation of where that checkbox is.

Regards,

Anish