When invoicing projects with fixed fees, it is important to know how well the project when comparing to the entered hours. Managers have questions like; "How well do we succeed in setting the price for our fixed-price projects?" or, "How much do our team members generate billing with all these projects that are priced differently?". With "team productivity", answers to these questions are easy to get when using Visma Severa, see below yourself and be amazed!
Value of hours
The basis for everything, is the value of hours. It means that even when invoicing projects with fixed fees, the work hours have a value, which comes from the price list. Value of hours is calculated for each team member based on the work hours they enter. Value of work hour is the same as the price of work hour and this is supported in the price lists, where it is easy to define which work hours will be invoiced and which will contribute only as value.
How well do we succeed in setting the price for our fixed-price projects?
Look at your "Project success rate", which compares the project's value of hours to the actual invoicing. If your project success rate is constantly negative or small, maybe you should start thinking about changes in your pricing.
How much do our team members generate billing with all these projects that are priced differently?
Look at the "Share of billing" for employees to see how much of invoicing goes to each person. There are few options you can do with this, for example decide if you wish to share the total billing or just the billing that is based on your own work. You can also define, if the billing is divided based on the entered work hours, value of hours or cost of hours.
In more detail, how does it work...
Because fixed fee invoicing is done using products, products are divided into three product types. With the product types, we can define different kinds of fixed fee invoicing, whether we are invoicing actual physical products, external work or internal work. All products will have as default "own work" as product type. When adding products to product register, the type should be corrected based on what the products really are. Product type options are "Own work", "Subcontracting" and "Products". There is a "Product type management" tab in the Products page to help with updating the types. so that type can be changed for multiple products on one go. In Visma Severa you can also add items to an invoice that aren't connected to products in product register. Product type can be selected for these items also, when adding them through case's products-section or directly on to the invoice.
Price lists should be set with work hour prices as they have been "sold". The price of work hour equals to value of work hour. So, in short, all projects should have price lists where prices for work hours are defined, so that work hours entered for the project will have value. There are many ways to set the work hour pricing, for example have a price per person, or price per work type. Read more about how work hour pricing rules go from Work hour pricing-article.
On the price lists, there is "bill selected" check box that controls if the work hours really go to invoice, or if the work hours are only considered as value for the project, when invoicing is done with fixed fees.
Work hours with price are considered as "billable", even if the invoicing is done with fixed fees. This ensures that employees Billable-% is still correct regardless of how project is invoiced.
There is a settings page for Team productivity, where you should define how is the share of billing calculated for the employees in your company. As default, employees get their "Share of billing" based on the value of hours. Share of billing can also be divided based on quantity of work hours or by employee costs.
You can also choose what kind of invoicing is shared for the employees. As default the billing consists of invoiced work hours and products with type "own work".
The setup of how "Share of billing" is calculated in your organization, is then used on projects and reports.
On each case, there is a section called "Team productivity", where you can see how many hours each member has entered, what is the total value of those hours, how many percentages is billable and what is their share of billing in monetary value and in percentage. At the end of the project, if you aren't happy with the automatic share of billing calculations, you can edit the values manually.
Follow the team productivity figures on case, user and work hour related reports. Read from our Glossary-article what they mean and how they are calculated.
- Value of hours
- Value per hour
- Share of billing
- Share of billing per hour
- Share in %
- Share of billing, by value of hours
- Share of billing per hour, by value of hours
- Share of billing, by quantity of hours
- Share of billing per hour, by quantity of hours
- Share of billing, by cost of hours
- Share of billing per hour, by cost of hours
- Employee margin
- Employee sales margin
- Billing per hour, based on invoicing of own work
- Project success rate
Note, when using flat rate
All work hours get a value based on the hourly pricing rules, except the ones entered for phases with flat rate pricing rule. The value of these hours is the price of additional hours. If you do not have price for additional hours, it is recommended to use products for the fixed fee pricing rather than flat rate, because if the additional hours price = 0,00, then all work hours entered for the phase are considered to be non-billable and their value is 0,00.