Time tracking software can have powerful benefits for professional firms, including increased revenue, employee utilization rate, and profitability.
Understanding Your Firm’s Contract, Budget, and Billability Analysis
Contract, budget, and billability analysis are three important key financial metrics used to measure your project performance.
There are some key metrics that you should keep tabs on to ensure your project is on track. But even with the best intentions and most experienced project lead, it’s challenging to stay on top of KPIs without support. Real-time project management software makes it easy to measure and analyze project status related to contracts, budget, and billability, so you finish projects on time, within budget, and earn a profit.
Let’s get started learning what each of these performance indicators are, why they matter for your business, and how software helps you accurately measure and optimize them.
What is a Contract Analysis?
Your contract analysis offers deeper insight into what’s remaining in your contract. It shows you the contracted amount, what’s been spent so far, and what’s left. This information enables you to forecast whether a project will exceed the contracted amount, so you can properly prepare or take action.
With BQE CORE, a Contract Analysis report is generated that provides a detailed comparison between project contract amounts versus service and expenses during a specific period. The report also shows estimated completion and actual percentages based on a project’s progress. This helps the team stay aligned by highlighting project completion progress and showing what’s still to come.
What is a Budget Analysis?
A budget analysis assesses your services and expenses in terms of what’s been used and what your limits are. It tells you whether a project is over-budget or nearing budget and is impactful in preventing scope creep.
CORE’s Budget Comparison report shares the actual time and expense entries logged for a project compared to the estimated limits in the original project budget. This report is commonly organized by “budgeted,” “spent,” and “remaining.” A budget analysis shows your team which tasks they still have to tackle, and its phase-level breakdown lets PMs identify where budget overages occurred.
If you’ve exceeded your budget, project overrun has occurred and will unfortunately hurt your firm’s profits. Leveraging a tool like CORE helps prevent this from happening by notifying you before it does, so your project manager can adjust.
What is a Billability Analysis?
Your billability analysis helps you evaluate the billability and productivity of a project. It offers a breakdown of your services and expenses in terms of billable, billed, unbilled, and non-billable. When you compare billable to billed, you see what you’ve earned and what’s in the pipeline.
Your billing breakdown lets you assess your client, project type, and employee utilization. You can see what percentage of your bills have been paid or remain unpaid, so you can plan your next steps and avoid issues in the future. If you’re billing clients more than you’d planned, it’s possible your planning was off or that your team isn’t as productive as you thought. In the future, you may need to plan for additional time or staff, or provide your team with more training.
Tracking Your Margins
Knowing your margins allows you to analyze profit or loss on a project. To calculate margins, you need to track billable or billed services and expenses plus their profit/loss margins to determine if you’re charging enough for your work. If calculating and tracking all these metrics feels overwhelming, you should try out project accounting software, which automates much of it for you.
Having quick access to high-level overviews and detailed calculations for each project phase supports your internal forecasts and allocation of income, expenses, and resources. The longer you use software like BQE CORE, the more data you have available to you, so you have extensive evidence of how your firm’s finances are progressing and how your team performs in critical areas.
What KPIs Should You Track?
Other crucial metrics beyond the ones above provide insight into how effectively you’re planning, staffing, and executing your firm’s projects. CORE allows you to automatically track data and generate reports related to:
- Billable utilization
- Employee realization rate
- Monthly revenue by project
- Earned value
- Percentage billed
- Profit & loss comparison
- Unbilled time
- Project profitability
- Resource capacity
To help you more effectively plan projects and collaborate with team members and clients, CORE’s popular project management features include:
- Built-in Gantt charts
- To-do tasks
- Project notes
- Document storage
- Project groups
- Time tracking
- Expense tracking
- Fee schedules
- Task management
BQE CORE for Project Planning and Reporting
CORE works to improve your project management by making it simple to track and understand performance indicators in real-time. Our platform centralizes project planning, monitoring, time and expense tracking, billing, accounting, analytics, and more, and you can access it all from your smartphone or desktop!
CORE’s user-friendly dashboards make it easy to see the status of projects and track your firm’s overall finances in terms of what’s ready to bill, paid, or overdue. Our reports save you time and help you understand employee performance, project profitability, and how to reduce your non-billable hours.
Gain access to analytics such as utilization, effective bill rate, ideal pay rate, and more. In a few clicks, customize any report according to date, client, project manager, project, phrase, and more. Set up reports to generate automatically on your desired schedule, and have them emailed to specific stakeholders.
Your firm can’t evolve and improve without understanding its successes and growth opportunities. Try CORE today to supercharge your efficiency and revenue!