Cost Rates & Project Profitability

Set default costs as fallbacks for internal people and externals

You can set costs at settings → Financials → Costs.

You can choose a default cost for an internal employee and an External consultant.

If the position on the project has no more specific cost, Operating will use the base cost rate to estimate profitability.

Set cost cards for each of your sites

Costs are site-specific as labor costs differ based on location. Set cost rates for unspecified roles, roles, and for seniority levels.

E.g. a senior project manager in London might cost £120/hr while the same role in Finland might cost €100/hr. This will yield a different project profitability per position even if the rate you charge the client for is the same.

Override costs on an individual level

You can go as far as set person-specific costs. Under everyone’s personal profile you can find a section called employment > add cost rate.

Use this to override the role- and seniority-based rates when you’ve finally staffed a person on the project.

View planned project margin on the timeline

When you’ve drawn project allocations on the timeline, you’ll notice the margin appear on the top right corner of the project drawer. Project margin is calculated differently for fixed price and time & materials projects:

• Fixed price = Project budget - Cost of work allocated

• Time & Materials = Amount of work allocated * charge-out rates - cost of work allocated

How to Override Cost Rates for Externals in a Project

By default, externals (subcontractors) use the cost rate defined in their profile or by their role, site, and seniority. However, you can set a different cost rate for them within a specific project. This allows you to reflect project-specific agreements or varying subcontractor costs.

Steps to override cost:

1. Open the project where the external is assigned.

2. Locate the external’s position by clicking the person’s name

3. Click Edit position.

4. Toggle Override cost on.

5. Enter the desired hourly cost and select the currency.

6. Save your changes.

The overridden cost will now apply only within that project and that specific position. It does not affect the external’s default cost in other projects.

Limit access to cost calculations in the permissions settings

You can limit who can see and manage cost rates under settings > permissions by toggling the checkbox for costs on and off. Note that there are two checkboxes for edit and view permissions separately.

Introduction to project financials tracking for a single project

Effective Rate on Fixed Price Projects

For fixed price projects, Operating calculates an effective hourly rate by dividing the project budget by the total allocated hours. This tells you what you're effectively earning per hour of work. The fewer hours spent delivering the project, the higher the effective rate.

How Rate Cards Tie Into Fixed Price Budgets

Even on fixed price projects, Operating uses your charge-out rate cards to estimate what the allocated work would cost as if it were billed on a time & materials basis. This allows you to see how much of the budget has been "allocated" and compare the opportunity cost of different team compositions — for example, staffing a senior consultant from an expensive location versus a junior from a lower-cost one.

Planned Margin

The planned margin shows the expected profitability based on current allocations. It is calculated as the project budget (or work estimated * hourly rates) minus the total estimated cost of all allocated people. Costs are determined by the cost rates assigned to each person's role, seniority, and site.

Setting Progress on Fixed Price Projects

For fixed price projects, Operating needs to know how far along the project is in order to calculate earned revenue. Project managers do this by setting a progress percentage in the project's financial setup. This progress figure is separate from planned or tracked hours — it reflects the project manager's judgment of actual completion.

Actual-to-Date Margin

Once progress has been set (progress setting only applies to fixed price projects), Operating calculates an actual-to-date margin by comparing earned revenue (based on progress) against actual costs incurred. If more time has been tracked than originally planned but progress is behind, the actual margin will be lower than the planned margin, indicating the project is running over budget.

Project Status Page under project details

The project status page provides a detailed financial breakdown, including cumulative and periodic comparisons of planned versus actual figures across hours, revenue, and costs. The calculations shown adapt to the project type — fixed price or time & materials. You can drill down to individual team members to see their planned and actual contributions.