---
sourceDocument: Brazil Strategic Portfolio Management
sourceDocumentLink: https://www.servicenow.com/docs/r/it-business-management

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    - brazil

ft:locale :

    - en-US

ft:publication_title :

    - Brazil Strategic Portfolio Management

ft:clusterId :

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workflow :

    - Technology


---

# Actual cost and effort calculation

# Actual cost and effort calculation for demands {#ariaid-title1}

Release version: Brazil  
Updated September 10, 2026  
![](https://www.servicenow.com/docs/portal-asset/ico-clock) 5 minutes to read
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This content was generated using new OpenAI-powered functionality. Results are provided on an as is basis and are not guaranteed to be accurate or complete.  

## Summary of Actual Cost and Effort Calculation for Demands

This content explains how ServiceNow calculates the actual cost and effort incurred for demands and their associated demand tasks.
Actual cost and effort represent the realized expenditure and time spent on demand activities during a specified period, based on approved time cards and resource hourly rates.
Understanding these calculations enables demand managers to accurately assess and plan demand-related work.
Show full answer Show less  

## Calculation Methodology

* **Actual Cost:** Calculated by multiplying hours reported on time cards by the hourly rate of each resource.
* **Actual Effort:** Derived directly from hours reported on time cards.
* Costs and effort recorded per demand task are rolled up to generate total demand-level actual cost and effort.
* The hourly rate for a resource is determined in this order:
  * Hourly rate defined in the demand's associated rate model (if present).
  * Default labor rate if no rate model or hourly rate in the rate model is found.
  * Default system property rate if neither of the above rates exists.

## Key Considerations for ServiceNow Customers

* Resource assignments created on demands are used only for resource estimation and automatically move to work entities when demands qualify and convert; they do not track actual cost or effort.
* Actual cost and effort must be recorded via time cards submitted against demand tasks or the demand itself for hours not linked to tasks.
* Extra hours worked outside demand tasks must be recorded separately through the Time Sheet Portal and contribute to total demand actual cost and effort, but not to individual demand tasks.
* Actual cost and effort values are displayed in the **Demand Actual Cost** and **Demand Actual Effort** fields on the demand's Financials tab, reflecting the sum of all demand tasks plus any extra activities.
* If a demand has no tasks or assigned resources, time cards can still capture actual cost, which creates expense lines that roll up into the demand's actual cost.

## Practical Example

A demand with three tasks assigned to different resources illustrates how actual cost and effort are calculated under different rate derivation scenarios:

* Each resource logs 8 hours on their assigned demand task.
* Depending on whether the rate model, default labor rate, or system property rate is used, the hourly rate varies, affecting the total actual cost.
* Actual effort sums consistently to the total hours worked (24 hours in the example).
* The Demand Actual Cost field reflects the sum of all task costs plus extra activities, enabling demand managers to view comprehensive expenditure.

## Benefits for ServiceNow Customers

* Provides transparency into true cost and time invested in demands and demand tasks.
* Supports accurate financial tracking and resource planning using time card data and configurable hourly rates.
* Enables demand managers to monitor and control demand-related expenses effectively throughout demand lifecycle.  
The actual cost and effort are realized cost incurred and time spent for the work
performed on a demand and demand task during a specific time period. Calculations are based on
approved time cards and the hourly rate for each resource. The hourly rate determines how
actual cost and effort vary.

Working on a demand task and demand involves cost and time, which add to the overall expenditure of converting a demand to a product, feature, or enhancement. Demand managers must therefore know the actual cost and effort incurred
in assessing and planning activities for a demand. The calculation for actual cost is derived by multiplying the hours reported in the time card by the hourly rate of the resource. The actual effort for a demand task is calculated
based on the hours reported in the time card.

The actual effort and cost for the demand tasks are then rolled up for calculating the actual effort and cost for the demand. The calculation of the actual cost and hourly rate for a resource is derived as follows:

* If a rate model is associated with the demand, the actual cost is calculated based on the hourly rate defined in the rate model.
* If a rate model is absent or if an hourly rate isn't found in the rate model, then the hourly rate is derived from the default labor rate.
* If an hourly rate isn't found in the default labor rate, then the hourly rate is derived from the default system property.

{#actual-cost-effort-calculation-demand__ul_e4r_w2b_fhb}

Don't create and use resource assignments for allocating resources or groups to a demand task. The resource assignments that you create in the demand are used for the resource estimation of the work entity that would be created
from the demand. These resource assignments are automatically moved to the resulting work entity when a demand is qualified and converted.

When you submit a time card for a demand, the actual effort and cost aren't reflected in the resource assignment. Resource assignments aren't associated with the demand by default. The actual cost and actual effort remain with the demand. They aren't transferred to the project created from the demand, even if you manually associate a resource assignment with the demand.

If a resource spends extra hours working on a demand that aren't associated with demand tasks, then this time must also be recorded. The resource submits the time card for recording the extra hours spent on the demand using the
Time Sheet Portal. This extra cost and effort is added to the demand but isn't reflected in the actual cost and effort for the demand tasks.  
The actual cost and actual effort for the demand as derived from the time card data is added to the total actual cost and effort for the demand tasks. The values in the Demand Actual Cost and Demand Actual Effort fields are calculated as follows:

* Demand Actual Cost: actual cost of all the demand tasks + actual cost of extra activities
* Demand Actual Effort: actual effort of all the demand tasks + actual effort of extra activities
{#actual-cost-effort-calculation-demand__ul_wxh_syt_23b}

If a demand has no task or assigned resource, you can capture the actual cost by submitting a time card against the demand. Once the time card is approved, an expense line is created on the demand. The expense line is then
processed and the actual cost of work for that time card is rolled up to the demand into the Demand Actual Cost column.

The following example demonstrates the actual cost and effort calculation for a demand task and its rollup to the demand.  

## Actual cost and effort calculation based on the demand tasks

For a demand (D1), the demand manager delegates activities such as initial assessment, cost estimate, and effort estimate. To delegate these activities, the demand manager creates three demand tasks (DT1, DT2, and DT3) and
assigns resources R1, R2, and R3 to each demand task respectively.

The hourly rate defined for the resources in the rate model, default labor rate, and default system property are listed in the following table.
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| Resource | Hourly rate in the rate model | Hourly rate in the default labor rate | Hourly rate in the system property |
|-|-|-|-|
| R1 | $200 | $150 | $50 |
| R2 | $250 | $200 | $50 |
| R3 | $150 | $100 | $50 |
[Table 1. Hourly resource rate]

{#actual-cost-effort-calculation-demand__table_vtp_hwt_23b}

Each resource spends a total of eight hours while working on the assigned demand task and submits a time card.

Actual cost and effort calculation for demand task: The demand task actual cost and effort are calculated and displayed on the Demand Task form. The totals differ depending on the method used to derive
them.

Scenario 1 shows how the total is calculated if the resource hourly rate is derived from the rate model.
{#actual-cost-effort-calculation-demand__table_sxl_rwt_23b__entry__4}

| Actuals | Demand task DT1 | Demand task DT2 | Demand task DT3 |
|-|-|-|-|
| Actual effort | 8 hours | 8 hours | 8 hours |
| Actual cost | 200 \* 8 = $1600 | 250 \* 8 = $2000 | 150 \* 8 = $1200 |
[Table 2. Rate derived from the rate model]

{#actual-cost-effort-calculation-demand__table_sxl_rwt_23b}

Scenario 2 shows how the total is calculated when the rate model isn't associated with the demand. In this case, the resource hourly rate is derived from the default labor rate.
{#actual-cost-effort-calculation-demand__table_txl_rwt_23b__entry__4}

| Actuals | Demand task DT1 | Demand task DT2 | Demand task DT3 |
|-|-|-|-|
| Actual effort | 8 hours | 8 hours | 8 hours |
| Actual cost | 150 \* 8 = $1200 | 200 \* 8 = $1600 | 100 \* 8 = $800 |
[Table 3. Rate derived from the default labor rate]

{#actual-cost-effort-calculation-demand__table_txl_rwt_23b}

Scenario 3 shows how the total is calculated when the rate model isn't associated with the demand. In this case, the resource hourly rate is derived from the default system property.
{#actual-cost-effort-calculation-demand__table_uxl_rwt_23b__entry__4}

| Actuals | Demand task DT1 | Demand task DT2 | Demand task DT3 |
|-|-|-|-|
| Actual effort | 8 hours | 8 hours | 8 hours |
| Actual cost | 50 \* 8 = $400 | 50 \* 8 = $400 | 50 \* 8 = $400 |
[Table 4. Rate derived from the default system property]

{#actual-cost-effort-calculation-demand__table_uxl_rwt_23b}  

## Actual cost and effort roll up to a demand

The Demand Actual Cost and Demand Actual Effort fields on the Financials tab of the Demand form are populated with the sum of actual costs and actual effort of all the demand
tasks.

1. If the resource rate for the demand task is derived from the rate model (Scenario 1), the value in the Demand Actual Cost field is displayed as $4800. The value in the Demand Actual Effort field is displayed as 24 hours.
2. If the resource rate for the demand task is derived from the default labor rate (Scenario 2), the Demand Actual Cost field displays $3600. The Demand Actual Effort field displays 24 hours.
3. If the resource rate for demand task is derived from the default system property (Scenario 3), the value in the Demand Actual Cost field is displayed as $1200. The value in the Demand Actual Effort field is displayed as 24 hours.
{#actual-cost-effort-calculation-demand__ol_dws_ywt_23b}