Types of Budgets
In Costlocker, we can use different types of budgets when creating projects, depending on how each project is priced. Here are the four main types of budgets available:
The budget type only determines the method for calculating and allocating project income and profit. The method for calculating project costs is described in a separate article.
1. Time Estimates
This budget type is based on the estimated number of hours required to complete the project.
The final price is determined as estimated hours * hourly rate for each budget item.
You can estimate hours based on:
Person: Each person is assigned a specific number of hours for the activity.
Activity: A certain number of estimated hours is assigned to a specific activity involving multiple people.
For example, when planning a website, we can estimate that the designer will spend 30 hours on design and the developer will spend 50 hours on programming. This type of budget helps track whether the project is progressing as planned and if the estimated hours are being exceeded.
This budget also allows for more accurate allocation of profits to individuals and activities, so it is recommended over fixed pricing.
2. Fixed Fee
In a fixed budget, the project budget is created by setting fixed prices. Fixed prices can be set for:
Specific project activities
A fixed total amount for all work
This budget type is ideal for projects where the client pays a fixed amount for the entire project, such as $5,000 for creating an advertising campaign. In this case, you don't need to worry about the number of hours worked, but rather ensure that all activities are included in the total amount.
3. Timesheet
This budget type creates the project price retrospectively, based on the actual time worked. You can choose the client rate by:
Person: Each person has a specific hourly rate.
Activity: Each activity has a specific rate, regardless of who performs it.
A timesheet budget is useful when working on a project where the time required cannot be estimated in advance. For example, in consulting services, where the client pays by the hour for consultations – at the end of the project, all billable hours are totaled, and the project’s revenue is calculated from them.
4. No Budget
This type of budget is ideal for any projects that are not paid for, such as internal projects or participation in tenders.
How to Choose a Budget Type in Costlocker
In the image, we can see how to select a budget type when creating a project in Costlocker. You can choose between Time Estimates, Fixed Fee, Timesheet, or No Budget. This system allows easy budget setup according to the needs of the project.
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