The billable employee section will show the actual cost of your
employees and will calculate a labor rate per minute to charge
the client. The labor rate will cover the employee's costs and
their portion of the other company expenses and their portion of
profit. Each employee is broken down by wages, employer taxes,
benefits, and other costs incurred by the employer, and are
totaled to show the true cost of the employee to the business.
The cost per billable minute is the employees per minute cost to
the owner while at work, whether the employee is billing or not.
The labor rate per minute is calculated off of the employee
cost per minute, the labor % and the production factor. The
labor % (billable labor %) inherits its value off of the
company global page and is based on your desired profit.
The production % should be modified for each employee to
reflect the number off billable hours in a work period. In
this case, Tom's is set to 75% which means on average he is
billed out, or is charged out 30 hours out of 40. In a week,
when Tom bills out the 30 hours, his labor rate charged to
the client will cover all of his employee costs, and will
cover his % of expenses and his % of profit. In a month, if
Tom bills out 130 hours, (75% of 173 avg hrs/mth) he will
cover his employee costs, and his % of other expenses and
his % of profit. The production % you set for this employee
is a goal he/she needs to hit accurately. The closer you are
to attaining projected hours to actual billable hours, the
closer you will be to achieving your desired profit.
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