Table of contents6 sections
How to account reliably for a team’s work across many projects
In a single month, one specialist may work on several projects, serve regular clients and take on internal tasks. Their salary alone does not show what share of the cost should be charged to a particular job.
Without reliable allocation of working time, a company can see a project’s revenue but not know its real margin.
Why the number of hours is not enough
An hour of work can have a different cost for each employee or contractor.
The real cost of a specialist is affected by, among other things:
- salary or a B2B invoice
- contributions and additional benefits
- paid absences
- software and tools
- workstation costs
- time not used directly on projects
This is why 20 hours of work by two different people does not have to mean the same cost for a project.
How to account for a team’s work correctly
Record time against specific tasks
Every hour should be assigned to a project, a client or an internal task. A general entry such as “work on the project” makes later analysis harder.
Set the hourly cost of each specialist
The company should determine the cost of each person’s work. This is not the selling rate charged to the client, but the real cost the business bears.
Separate project work from internal work
Company meetings, training, administration and the development of your own products also take up the team’s time. They should not, however, automatically be charged to client projects.
Compare actuals with the budget
Collecting hours is not enough on its own. You need to compare regularly:
- hours planned
- time already used
- cost incurred
- budget remaining
- forecast cost of completing the project
This way a budget overrun can be spotted before the work is finished.
The most common mistakes
The most common problems include:
- no regular time tracking
- entering hours only at the end of the month
- assigning an entire B2B invoice to one project
- ignoring the work of several people for the same client
- comparing revenue only with external costs
- analysing profitability only after the project has closed
As a result, a company may judge a project to be profitable even though the team’s extra hours consumed most of the planned margin.
How Administy helps account for a team’s work
Administy links working-time data with the individual cost of an employee or contractor.
The system lets you:
- import working time from a project system
- assign hours to specific projects
- convert time into real cost
- split a specialist’s cost across several jobs
- compare the hours budget with actuals
- monitor the current and forecast margin
- check how many hours and how much money remain until the project is complete
- analyse results by project, client and employee
As a result, a contractor’s monthly invoice or an employee’s salary does not remain one general cost. The company sees which projects really engaged the team and what cost they generated.
Summary
Reliable accounting for a team’s work requires combining three pieces of data: working time, the specialist’s cost and the project the work was for.
Administy automates this combination and shows the impact of the team’s hours on a project’s cost and margin. This helps a company detect budget overruns earlier, plan staff availability better and assess the profitability of jobs based on data.
