Budgets are created in two different ways:
Create a budget by winning a deal
A sales deal is a term we use for a pitch that can turn into a project but it's still in the sales phase. Here, you can add all the services you'll sell to your client with billing type, unit, quantity, and finally prices for those services.
When marking a deal as won there is an option to Create a new project, Add a budget to an existing project or you can set your deal as won, but not create a project.
When creating a new project, the financials you created in the deal will transfer to the project as a budget. You can edit that budget by selecting it from the list or you can create a new budget by clicking on the +Budget button to the very right.
When adding a budget to an existing project, you can choose one of the projects from the list that had already been created for that client. Your new budget will list among other budgets in that project.
Create a budget from scratch / create a budget from a project
You can also add a new budget directly to an existing project while you're on the Project page. A predefined blank budget with open hours and expenses will show up. This allows the employees to track time against services in that budget even if the rates are still not defined.
You can edit a predefined budget or create a new one. To create a new one click on the +Budget button.
Give a name to your new budget and hit the Create budget button.
If you create a budget from scratch or edit an existing budget, the budget overview is the same. There are some differences when creating an internal project and a client project, and we will cover those differences below.
The budget consists of the:
1. NAVIGATION PANE
The Services tab is the main part of the budget. It contains Basic information, the Budgeting/Profitability section, and Services, explained below.
The Feed tab is an overview of everything that was happening on the budget. If you want to add a comment enter text into an input field, mention people, add attachments and save.
The Time tab shows how much time is being spent on a budget and by whom. Click here to see a detailed overview of time entries on a budget.
🚀 BETA FEATURE: The Invoice tab shows invoices linked to the budget in question, with adding fields, grouping, and filtering options. You can select one of the budgets in the table, or create a new one by clicking on the +Invoice button to the right.
The Expenses tab is replacing previous Out of the pocket Expenses, and it shows all expenses linked to the budget. To add an expense, you will first need to create a service line item with the Unit set as Piece.
The Recurring tab is used to manage retainer projects or maintenance projects. On how to set up a recurring budget check here
2. BASIC INFORMATION
A budget number is a number that shows you the correct key in the budget database. This number is generated automatically and you can't change it.
A PO Number uniquely identifies a purchase order and is generally defined by the buyer. The buyer will match the PO number in the invoice to the Purchase Order. You can add a PO number manually. If the project is internal, it will not have a PO number.
The budget date range is the date that affects for which period the revenue and costs from this budget are reported.
Currency is the budget currency you choose from the list. Be aware that changing the currency does not recalculate the amounts, it only changes the currency symbol (for example, $1.000 will become 1.000€).
With the Client access toggle button, you can enable or disable clients' access on that budget. If you enable it, the client can access that budget and view approved time entries. To see a bit more of what can client see on a budget check here. If the project is internal, it will not have Client access.
With Approvals, you can enable or disable Time approvals and Expense approvals. If you enable it, the time entries and/or expenses need to be approved by the Budget owner and it will appear in their Approvals section.
Time warning is very useful if you wish to keep an eye on the time spent on a budget. Turning on Time warning for a budget, the Budget owner will get a warning when billable hours reach the percentage of estimated hours. Put down a threshold after which you want to be notified. You'll get an e-mail when billable hours reach the percentage of estimated hours you set up.
3. BUDGETING / PROFITABILITY
This Budgeting section calculates the remaining budget as your team members track time. It multiplies billable rates with billable time and subtracts the calculated amount from the total budget. Click on the right on the New invoice to create an invoice.
The Profitability section represents your internal profitability. Profitability is calculated by using employees' Cost rates per hour, multiplied by the hours they've tracked. By comparing the billable rate against the Cost rate of the employee and their time tracked, the profit margin calculates. Also, not only time tracking affects the remaining budget and the profitability of the budget. Expenses can affect the budget too, and to see a bit more, check here. If you wish to invoice, click on the right on the New invoice to create an invoice.
Make sure you keep all the financial information (services, expenses, discounts) in the budget accurate. Otherwise, your profit and revenue figures won't show the real balance.
Internal projects have a simpler budget overview. The budget represents the time spent in relation to the Cost rate of each person that tracks time and other expenses that occur on that budget. You cant invoice an internal project.
If you're creating a budget manually (not from a deal that was won), the first thing you'll need to do is to add Services. When you click on the Edit button on your budget, you can add new items or change your budget data.
Sections allow you to group services into different categories (e.x. Design, Development, etc.). You can add a new item or new item from the rate card.
Each Section consists of:
The service type is what you offer to a client.
Billing type - Fixed, Actuals, Non-billable
Unit - Time (Budget in hours or days, track time in hours) or Expense (Budget and track out of pocket expenses). By clicking on the 🕑 icon, you can enable or disable the time tracking option. By clicking on the 📄 icon, you can enable or disable the expense tracking option.
Price - The price of the service you offer to a client.
The total budget of that section, and budget per service.
Click on the sidebar to the right of the Section to add additional fields like Discount, Estimate, and/or Description.
On how to create services and add them to your sales deals and budgets please see here.