How SmartBudget rates are calculated

The purpose of Polaris PSA’s SmartBudget feature is to help Professional Services Organizations (PSOs) achieve optimal profitability. Refer to Maximizing profit with SmartBudget for more information.

See below for information on how each value in the SmartBudget tables is arrived at.

Hours worked by role

Field name

Description

How it's calculated

Role

A billable role in Polaris PSA

Hours

Scheduled hours for all users assigned that primary role, for the plan period

= Total for all users with that primary role(scheduled days in period * hrs/day)

Cost calculations

Field name

Description

How it's calculated

Direct Cost

Total direct cost of users assigned that primary role, for the plan period

= Total for all users with that primary role(user’s assigned Direct Cost for period)

Direct Hourly Cost

Cost of billable workers in that role, per billable resource scheduled hour, for the plan period

= Direct Cost / Hours, for role, for period

Non-bill Overhead Hourly Cost

Cost of non-billable workers per billable resource scheduled hour, for the plan period

= Total cost of non-billable resources/Total Hours for billable resources, for period

Non-bill Overhead Direct Cost

Total cost per role for non-billable workers, for the plan period

= Total cost of non-billable resources(Total Hours for role/Total Hours for billable resources), for period

Business Overhead Hourly Cost

Cost of business overhead per billable resource scheduled hour, for the plan period

= Total cost of business overhead/Total Hours for billable resources, for period

Business Overhead Direct Cost

Total cost per role for business overhead, for the plan period

= Total cost of business overhead(Total Hours for role/Total Hours for billable resources), for period

Loaded Labor Cost

Total costs per resource billable hour, per role, for plan period

= Direct Hourly Cost + Non-bill Overhead Hourly Cost + Business Overhead Hourly Cost, per role, for period

Margin and utilization goals

Field name

Description

How it's calculated

New Utilization Goal

Proportion of all resource scheduled hours that are billable

User supplies this value

Current Utilization Goal

The target utilization rate set for the role today (not necessarily for the plan period)

Set at Administration > Projects > Project Roles

New Margin Goal

Profit margin you aim to earn

User supplies this value

Calculated billing rate goals, revenue and profit

Field name

Description

How it's calculated

New Billing Rate Goal

Billing rate you need to charge for that role to achieve desired margin for the plan period, based on the available costs, and the supplied utilization rate.

= Loaded Labor Cost*Hours / ((1-New Margin Goal)*Hours*New Utilization Goal)

Current Billing Rate Goal

The default billing rate set for the role today (not necessarily for the plan period)

Set at Administration > Projects > Project Roles

Revenue

Amount earned by resources with that primary role for the plan period, based on the calculated billing rate and supplied utilization rate.

= Billing Rate * Hours

Profit

Profit earned by resources with that primary role for plan period, based on the calculated billing rate and supplied utilization rate.

= Revenue - Loaded Labor Cost