Setting up project pricing

In most cases the Total Budget is the figure your customer would refer to as the project budget, the amount they will be charged for the work overall.

This article will explain how to shape your project’s Total Budget with:

• Budgets

• Timecodes

• Top-Down and Bottom-Up settings for each.

 It will also cover:

• What are allocated hours?
• What should I choose for my project? 

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Once you have created your project, here’s how you set up the Total Budget for that project

1. Click Set up a budget, or go to the Budgets tab.

2. Create your budget(s) and timecode(s).
   
   

What is a budget?

Budgets are similar to milestones, deliverables or phases, they are defined amounts of money that are consumed through logging billable time (time-based budgets) or expenses (expense-based budgets). In Projectworks, a Total Budget can consist of one or many budgets, and you can have a combination of types.

When you create a budget, you will choose if it is to be priced Top-Down or Bottom-Up.

Top-Down

You will enter a single fee for the budget.

• Use when you want to specify a fixed amount for that phase or deliverable.

• Available for both time-based and expense-based budgets.

Bottom-Up (time-based budgets only)

The budget’s fee is calculated from its timecodes.

• Each timecode has its own fee; the sum of all timecodes becomes the budget’s total fee.

• Use when you want the budget to reflect detailed scope and rates.
  
  

What is a timecode?

Timecodes represent specific activities, tasks or workstreams within a budget (e.g., “Discovery workshops,” “Frontend dev,” “QA”). Timecodes live inside budgets and become especially important when a budget is priced Bottom-Up, because they determine how that budget’s fee is built.

Pricing a timecode (in a Bottom-Up budget)

Within a Bottom-Up budget, each timecode can be priced in one of two ways:

Top-Down (set fee per timecode)

Set a flat fee for the timecode.

Bottom-Up (hourly-based per timecode)

Build the fee from allocated hours × billable rates by assigning People and/or Placeholders to the timecode.

What are Allocated Hours?

Allocated hours are set against People and Placeholders within timecodes, they are important for building Bottom-Up timecodes as they represent the quantity of hours in the hours x billable rate calculation for that timecode’s fee.

Allocated hours can also be useful in Top-Down timecodes as a way of managing budget consumption. You can switch on a system-wide setting that prevents people from logging time to a timecode beyond their quantity of allocated hours for that timecode. The feature can be activated by your Projectworks administrator.

Common combinations

• Top-Down budgets → Timecodes don’t have their own fees; the budget has a single fixed amount.

• Bottom-Up budgets → Timecodes can be a mix:

  • Some Top-down (fixed per timecode)

  • Some Bottom-up (hours × rates)

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What should I choose for my project?

Top-Down Budgets

Within a Top-Down budget, you can create as many timecodes as you like, and choose to allocate timecode hours to people at a given rate. Note that these won't 'bubble up' - the fee for the budget will not change from what was initially set.

• This is the simplest mode for creating a budget

• Build your budgets by setting a fixed amount

Top-Down Timecodes

In this mode, you will create your budget as Bottom-Up and then create one or many timecodes within it that are Top-Down. You can allocate timecode hours to people or placeholders at a given rate, but note that these won't 'bubble up' - the budget will always be based on the sum of the fees you have set for the timecodes within it.

• Set the budget amount for each timecode

• Timecodes within each budget line are added together, setting the budget amount

Bottom-Up Timecodes

In this mode everything is 'bottom-up', with the timecode’s fee being driven by the quantity of hours and rates within it. Any change you make to the hours or rates within that timecode will impact the fee for the timecode, the fee of the budget and therefore the overall project.

You can allocate hours against certain people or placeholders within timecodes using standard or customized billable rates.

• Within each timecode, pricing is calculated based on the number of hours allocated for each person and placeholder multiplied by their respective billable rates.