Project Cost Rates and Billing Rates

A project’s financial health depends on the cost or billing rates associated with the people performing the work in addition to hours worked and the number of people contributing to a project.

Project costs are determined by the cost of the work performed by team members and project expenses. Project revenue is determined by the team members’ billing rates. The monetary value of a team member’s work is determined by the amount of time they contribute to a project and their cost or billing rate.

Cost Rate

A cost rate is the hourly rate for a team member and is used for a project’s cost calculations. Cost rates are available to a project when it’s a monetary-based project.

Cost rates can be fixed or flexible.

• A Fixed Cost Rate is consistent throughout the project’s life. If you change the cost rate, then the project costs change.

• A Flexible Cost Rate changes depending on a date. You can add multiple cost rates in the future without negatively impacting the current project costs. If you adjust a cost rate that occurred in the past, the project costs change.

They can be applied globally by a Tempo Project Administrator or on the project level.

• Global rates are managed centrally by a Tempo Rate Administrator in Tempo Settings. Each project owner or account administrator can then choose to use the global rates.

• Project-level cost rates are managed locally by a project owner.

Global Cost Rates

A Tempo Project Manager can Apply Global Cost Rates to override any project-level rates. A Tempo Project Administrator can apply global rates for all new projects by default.

If you’ve added global rates AND your project’s hourly cost rate or billing rate is empty, the global rates are used by default.

Define Global Cost Rates in Tempo Settings under Rates.

Project-level Cost Rates

You can modify team members' rates on the project level to represent their costs more accurately. You can set the cost rate or the billing rate for a team member or for a role.

To set your project cost rate, see Setting Project Cost Rates.

Billing Rate

A billing rate is the billable hourly rate for a role and is used for a project’s revenue calculations. Billing rates are available if you enable Revenue Tracking for a monetary-based project.

Billing rates can be account-based or flexible.

• An Account Rate is a billing rate that’s associated with an account. Only global billing rates can be associated with an account. Global billing rates are managed by Tempo Rate Administrators, while accounts are managed by an Account Administrator. An Account Administrator must associate an account with a billing rate table.

• A Flexible Billing Rate changes depending on a date and can only be applied at the project level. You can add multiple billing rates in the future without negatively impacting the current project revenue. If you adjust a billing rate that occurred in the past, the project revenue changes.

They can be applied globally (as default rates) by a Tempo Project Administrator, per account, or on the project level.

• Global billing rates are used by accounts and are managed centrally in Tempo Settings by a Tempo Rate Administrator.

• Project-level billing rates are managed locally by a project owner.

Global Billing Rates

Global billing rates are used either as default billing rates for roles or as account rates. Billing rates are organized into tables that include the role and the rate for the role. Each billing rate table represents a separate set of billing rates for team member roles. If a rate is not defined in a project with revenue tracking, the default global billing rate is used.

Define Global Billing Rates in Tempo Settings under Rates.

Account Rates

Account rates are billing rate tables associated with an account by an Account Administrator. When a project uses account rates to track revenue, work performed or planned by a team member for issues associated with an account will use the account’s billing rates. A Jira issue is associated with an account by either adding the Tempo Account field to the Jira issue screen or by adding an account work attribute.

The billing rate for the team member is then determined by the role assigned to the person in the project. Depending on how many accounts are represented in a project, a team member can have multiple billing rates. However, an account can only have one billing rate table associated with it.

For example, Erica Brown logs work against two different Jira issues (INT-134 and PRO-879) that are tracked in the same project. She is assigned the Developer role in the project, so her billing rate is populated by the Developer role rate in the appropriate billing rate table.

Each issue is associated with a different account and uses different billing rate tables. INT-134 is billed to an internal account (Internal) and uses the Internal billing rate table. PRO-879 is billed to a customer account (H3 Energy Billable) and uses the External WebDev billing rate table.

When you view the work in Financial Manager, two different accounts and rates are listed for Erica Brown.

If Erica logs work against a Jira issue that isn’t associated with an account, the global default billing rate for the Developer role is used.

Project Billing Rates

You can modify team members' rates on the project level to represent their costs more accurately. You can set the cost rate or the billing rate for a team member or for a team role.

To set your project billing rate, see Setting Project Billing Rates.

How Rates Are Assigned

Depending on how the Financial Manager project is configured, rates can be assigned:

• manually for individual project members

• using team roles and global rates

• using the project’s default hourly rate when a rate is not otherwise specified

If a person is part of multiple project teams, they can potentially have multiple team roles and different rates for each project.

If you’re using global rates, you can’t manually edit the rates for individual members.

If a person has no role assigned, they will use the default role with the project’s default hourly rate.