How SmartBudget rates are calculated
The purpose of Polaris's SmartBudget feature is to help Professional Services Organizations (PSOs) achieve optimal profitability. Refer to Maximizing profit with SmartBudget for more information.
See below for information on how each value in the SmartBudget tables is arrived at.
Hours worked by role
|
Field name |
Description |
How it's calculated |
|---|---|---|
|
Role |
A billable role in Polaris |
|
|
Hours |
Scheduled hours for all users assigned that primary role, for the plan period |
= Total for all users with that primary role(scheduled days in period * hrs/day) |
Cost calculations
|
Field name |
Description |
How it's calculated |
|---|---|---|
|
Direct Cost |
Total direct cost of users assigned that primary role, for the plan period |
= Total for all users with that primary role(user’s assigned Direct Cost for period) |
|
Direct Hourly Cost |
Cost of billable workers in that role, per billable resource scheduled hour, for the plan period |
= Direct Cost / Hours, for role, for period |
|
Non-bill Overhead Hourly Cost |
Cost of non-billable workers per billable resource scheduled hour, for the plan period |
= Total cost of non-billable resources/Total Hours for billable resources, for period |
|
Non-bill Overhead Direct Cost |
Total cost per role for non-billable workers, for the plan period |
= Total cost of non-billable resources(Total Hours for role/Total Hours for billable resources), for period |
|
Business Overhead Hourly Cost |
Cost of business overhead per billable resource scheduled hour, for the plan period |
= Total cost of business overhead/Total Hours for billable resources, for period |
|
Business Overhead Direct Cost |
Total cost per role for business overhead, for the plan period |
= Total cost of business overhead(Total Hours for role/Total Hours for billable resources), for period |
|
Loaded Labor Cost |
Total costs per resource billable hour, per role, for plan period |
= Direct Hourly Cost + Non-bill Overhead Hourly Cost + Business Overhead Hourly Cost, per role, for period |
Margin and utilization goals
|
Field name |
Description |
How it's calculated |
|---|---|---|
|
New Utilization Goal |
Proportion of all resource scheduled hours that are billable |
User supplies this value |
|
Current Utilization Goal |
The target utilization rate set for the role today (not necessarily for the plan period) |
Set at Administration > Projects > Project Roles |
|
New Margin Goal |
Profit margin you aim to earn |
User supplies this value |
Calculated billing rate goals, revenue and profit
|
Field name |
Description |
How it's calculated |
|---|---|---|
|
New Billing Rate Goal |
Billing rate you need to charge for that role to achieve desired margin for the plan period, based on the available costs, and the supplied utilization rate. |
= Loaded Labor Cost*Hours / ((1-New Margin Goal)*Hours*New Utilization Goal) |
|
Current Billing Rate Goal |
The default billing rate set for the role today (not necessarily for the plan period) |
Set at Administration > Projects > Project Roles |
|
Revenue |
Amount earned by resources with that primary role for the plan period, based on the calculated billing rate and supplied utilization rate. |
= Billing Rate * Hours |
|
Profit |
Profit earned by resources with that primary role for plan period, based on the calculated billing rate and supplied utilization rate. |
= Revenue - Loaded Labor Cost |
Related links
Maximizing profit with SmartBudget
Adding and committing a SmartBudget
SmartBudget setup checklist