Budget by Cost Rates or Billing Rates

On the Project Budget Worksheet, you can create budgets using cost rates, billing rates, or both.

Billing Rates

If you enter budgets at billing rates, all labor and expense amounts are the amounts that you actually bill to the client. The billing-based budget shows the planned expenditures for labor, direct, and reimbursable expenses at their billing value. The contract value is often equal to the sum of all billing budgets.

Use the Labor Billing tab and/or Expense Billing tab on the Project Budget Worksheet.

Cost Rates

If you enter budgets at cost rates, you use amounts that reflect the planned costs of a project. This includes labor, direct and reimbursable expenses, and overhead. The difference between the contract value and budgeted cost is the budgeted profit. Cost-based budgets also include a profit percentage, which is calculated by dividing profit on services by the sum of compensation and consultant fees for the project.

Use the Labor Costs tab, Expense Costs tab, or both, on the Project Budget Worksheet.