Every Budget comes with 3 charts at the top. See below.

Each chart behaves differently and calculates using different information. This article will explain what affects the charts and how to read them.

Let's start with the simplest one...

# Invoicing

This chart is pretty straightforward. It calculates how much you've invoiced and how much you still need to invoice on this budget.

The example from the above is a Fixed price budget with a total revenue of $1,200.00.

We have invoiced $1,000.00 so far, meaning there's still $200.00 left to invoice.

# Budget chart (Remaining %)

This chart calculates the remaining budget by multiplying billable rates with billable time and **subtracting the calculated amount from the total budget** as your team members track time.

The current status is that out of the total initial budget of $3,700.00 we have $0.00 left.

So, how does the budget get spent, you wonder?

Let's look at the list of services that belong to this budget and focus on the first one in the list which is **iOS Development. **This is a service our client pays **$50/h** for.

If one of our team members tracks time against **iOS Development**, Productive will multiply the tracked time with the billable rate and subtract the calculated amount from the total budget. It works like this:

Team member tracks 5 hours against

**iOS Development**5 hours * $50/h = $250

**$3,700.00 - $250 = $3,450.00**, which will be the current remaining budget after those 5 hours have been tracked

# Profitability (Revenue chart)

So, now that we know how the remaining budget gets calculated, it's time to look at the middle chart that calculates profitability.

**This chart represents your internal profitability which we calculate using employee's Cost rates per hour, multiplied by the hours they've tracked. **

In the example above, a team member has tracked 5 hours against this budget. This has reduced the total budget by $250. At the same time, the profitability of this budget was affected too.

Let's say that the employee who tracked these 5 hours was Charles Blake. This is his Cost rate (salary) per hour:

5 hours * $6.25 = $31.25 of internal cost, which is the amount by which the profit margin was reduced after the hours have been tracked.

# Bottom line

So, all things considered, as soon as Charles logged 5 hours against this budget, two changes happened:

He reduced the

**total budget**by $250 (what the client wants to know)He reduced the

**total profitability**by $31.25 (what your agency wants to know)

# Worth knowing

## Cost overhead

Using this add-on will increase the internal hourly cost of your staff, making the profitability calculation even more accurate.

Read this article to learn more.

## Out-of-pocket expenses

Not only time tracking affects the remaining budget and the profitability of the budget. Out-of-pocket expenses can affect the budget too.

Read this article to learn more about adding expenses and their approvals.