Cost
Cost is the expense associated with employee work hours. In time tracking, cost is calculated by multiplying tracked time by hourly cost rates, enabling profitability analysis and budget management.
Key Characteristics
- Time-based: Calculated from tracked activities.
- Rate-dependent: Requires cost rates assigned to team members.
- Multi-currency: Can be tracked in different currencies per organization.
Cost Components
Net Cost
Billable time multiplied by cost per hour.
Cost Tax
Additional tax or overhead applied to net cost.
Total Cost
Sum of net cost and cost tax.
Cost vs Revenue
| Cost | Revenue |
|---|---|
| What you pay employees | What clients pay you |
| Based on internal rates | Based on billing rates |
| Expense side | Income side |
Impact on Workforce Planning
For businesses using time tracking software like Sandtime.io:
- Profitability analysis: Compare cost against revenue per project.
- Budget tracking: Monitor spending against project budgets.
- Resource decisions: Understand true cost of team allocation.
- Pricing strategy: Set rates based on actual labor costs.
Best Practices
- Set accurate cost rates for all team members.
- Update rates when salaries change using temporal rates.
- Review cost reports regularly against budgets.
- Include overhead in cost calculations when relevant.
- Track both billable and non-billable time for complete cost picture.
Cost Reporting
By Project
See total labor cost per project.
By Member
Understand individual contribution costs.
By Time Period
Track cost trends over months or quarters.
Common Challenges
Missing Rates
Team members without cost rates skew reports. Ensure all members have rates.
Outdated Rates
Rates not updated after raises. Use temporal rates to track changes.
Incomplete Tracking
Non-billable time not tracked. Encourage tracking all work time.
Related Terms
Cost is calculated from activities and hourly rates. It appears in custom reports alongside revenue. Cost rates can be managed as temporal rates for historical accuracy.