Best Practice: Consulting Project (Billing)?

[Jame Healy]

Hi,

Are there any anecdotal best practices out there for managing cost vs.
"price" for projects that are billed to a customer?

My assumption would be to use the resource cost rate table where tables "A"
through "D" would be resource pricing, but cost table "E" would be actual
cost of the consultant.

This isn't an elegant way of handling multiple/variable pricing per resource
based on project role, etc. (i.e. Resource X can be an Architect, Project
Manager or Development Lead; each requires a different rate).

Any thoughts?

 

[Steve House]

My thought is that the costs tracked by MS PRoject should represent the
operational cost to the firm of doing that particular project. It is the
wholesale cost of your firm's product. And just like Wal-Mart doesn't
expect their product order system to track their prices or revenues, we
shouldn't expect project to track ours either. So I'd use the wholesale
costs from Project as just one of the many inputs into my accounting system
that I combine into a cost of business that I use to determine the retail
pricing I offer my customers for the project work.

The various rate tables are there because we may have to pay a resource
differing amounts for different tasks they may do. In my classes I use a
film crew as an example. Sue is an assistant director and also qualified as
a camera operator. AD is covered under the Directors Guild's contract and
she gets $25 an hour when she has that responsibility. Camera operator is a
position covered by the contract with the cinematographer's union and that
contract calls for her to get a standard rate of $18 an hour when she is
functioning in that capacity. In our project we use her in both roles. In
some tasks she's an AD and in others she's handling the camera. The rate
table allow us to determine which rate is to be applied on a task by task
basis, so in scene 1 where she's acting as AD uses rate table A and is
costed at $25 per hour while scene 2 where she's handling one of the cameras
in a multi-camera film uses rate table B at $18. The problem with your idea
is that you can have only ONE of the rate tables active for any given task -
there's no way to show the cost from table A and table E simultaneously and
subtract one from the other to see the margin.

 

[Jame Healy]

All very good points Steve,

I guess I was hoping to be able to offer my clients a restricted and secure
view of the project via PWA.

Perhaps the use of a Resource Outline Code would help, or even a task
outline code that spoke to billing type (billable time, billable contract,
non-billable) and rate?

 

[Steve House]

I'm not sure an outline code or WBS code would do it either as they should
represent the position of the task in the WBS. But there are a number of
other user-definable fields you could use to capture that sort of
information. One point to consider ... MSP is accumulating costs to your
firm. Even non-billable time that you don't bill to the client is still
costing you money - Joe goes on a tech support call that is non-billable.
Even if you don't bill the client you still have to pay Joe.
--
Steve House [MVP]
MS Project Trainer/Consultant
Visit http://www.mvps.org/project/faqs.htm for the FAQs