Overhead Costs

Overhead Costs

Every company has certain overhead costs that are not directly tied to a specific project—for example, office rent, car leases, software licenses, and similar expenses.

If we record these costs in Costlocker, they will be automatically allocated to all projects.

Viewing Monthly Overhead Costs

Navigate to Your Company -> Costs

Overhead Costs - select

This will display the Costs submenu and open the Monthly Overhead Costs tab.

Overheads view

How to Add an Overhead Cost?

On the monthly overhead costs view screen, click on the Add Overhead Cost button.

Form for adding overhead costs

In the following form, fill in the cost name and select the type of cost you want to add. You have the following options:

Add Recurring Cost

A recurring cost repeats every month. Ideal for most expenses such as office rent, car leases, etc.

Add Cost

Here you have a one-time cost. Ideal for expenses like a Christmas party 😎

Add Income

If you have a one-time income that is not related to any project, you can enter it here—for example, selling old office equipment.

For our example, we will use the following overhead costs:

Item	From	Amount
Office	September 2024	$800
Small Equipment	August 2024	$80
Software	August 2024	$350

After saving, view the previous month. Here, we can see how much our monthly cost was for August (in our example, we are looking at August data):

Immediately here, we also see the automatically calculated overhead cost per worked hour.

You can read about how the overhead per hour is calculated in this article.

The overhead cost is then automatically calculated for the given month into the projects—see Rates.

It is always important to have as accurate numbers as possible in Costlocker to ensure the most precise results. It's better to have one "overhead" item in Costlocker that you update monthly rather than having many items that you update once a year.

How to Record a Change in Overhead Costs?

Click on the pencil icon for the particular Cost.

Overhead cost-edit

Click on Add Recurring Cost. After adding a new row to the form, you can change the date from which the cost will have a new amount, enter the amount, and confirm by clicking the Save button.

In the given example, the overhead cost for Small Equipment will $80 for the months of August-September. From October onwards, it will be $100.

What is the purpose of the end date?

You can use the end date for a cost if it is no longer relevant (e.g., you terminate a car lease).

How to Handle Depreciation?

Imagine that in September 2024, you purchased office equipment worth $20,000. If you enter it entirely as a one-time cost in September 2024, your overhead cost for that month will disproportionately increase, even though you will be using this equipment in the following months.

In such a case, you can spread the amount of $14,400 over a longer period. In our example, we decided to "depreciate" it over 2 years—in other words, we chose to use the equipment from September 2024 to August 2026 (i.e., 24 months) and add $600 to costs each month.

Costlocker will then correctly display the total amount of $14,400 i.e., the entire cost.

Clients often automatically upload overhead costs to Costlocker from Google Spreadsheet using Integration with Make. You don't have to make any manual interventions - it's enough to have accounting data in Google Sheets, for example.