In ClickTime, the Cost Rate is the approximate hourly cost of paying your employees. This is set on the Person Details page.
When used in tandem with Billing Rates, ClickTime can assist with the estimated profitability of the services/etc. that your team provides to your customers. For more details on Billing Rates, please see the Billing Rate Overview Guide.
Please be aware that while ClickTime data can be helpful in creating invoices and payslips, the Cost Rate and Billing Rate reports are provided for estimation purposes only.
When a new employee is added to the system, the Cost Rate field will automatically be populated with whatever the Default Cost Rate is. This is set on the Company --> Preferences page and can be changed at any time:
When a new employee is added to the system, you will have the option to change their Cost Rate by simply adding a new rate during the setup process:
Whatever is saved at this time will be the Person's Cost Rate for all of their time entries.
If you are not sure how to calculate a Cost Rate, ClickTime offers a function to help you calculate this number:
In this example, we have an employee who makes $60,000 a year with an expected work-week of 40 hours a week. This employee will likely earn a 10% bonus throughout the year ($6,000), and the cost of overhead (which can include payroll taxes, benefits paid for the employee, office expenses, and more) is estimated to be about 30% of their salary. Given these factors, ClickTime estimates the hourly cost of staffing this employee to be $40.38
It's generally difficult to predict exactly how much an employee will earn from bonuses, or what their overhead is exactly, and we also understand that some work weeks fluctuate, which is why we provide an approximate Hourly Cost for estimation purposes.
Companies that are Premier or higher have the ability to choose between two different Cost Rate models. Specifically, you can set salaried employees so that they have a set “cost per timesheet”, rather than a fixed hourly rate. Administrators will be able to “Adjust Costs” on Salaried Employee’s timesheets once they are approved (or locked), and ClickTime will evenly distribute the cost per timesheet across all hours on the timesheet.
To set an employee with a Salaried Cost model, select the “Salary” option and input a cost per timesheet, and a temporary projected cost per hour.
Cost per Timesheet - Enter the total amount that this employee costs during the set timesheet period. If your company uses a weekly timesheet, then enter their cost for a week. This can be as fully burdened as you’d like (Salary, Overhead, etc.).
Projected Cost per Hour - This is a temporary field used before a cost adjustment. This should be the best estimate of a Salaried person’s hourly cost. This field is independent from the Cost per Timesheet and does not need to “add up” to the Cost per Timesheet.
As a user enters time, ClickTime will use the projected cost per hour on time entries. There will be a dollar sign icon on the Company --> Timesheets page for any employees who have a Salaried Cost set on their Person Details page.
Once the timesheet is approved (or locked) it will be eligible for cost adjustment, which will evenly distribute the cost per timesheet over all hours worked. This will allow you to calculate the actual cost per hour in that timesheet based on the employee's salary.
In order to adjust Cost Rates, you will need to be logged into ClickTime as an Administrator and have already approved the timesheet(s) of any employees with a Salary cost defined.
Admins can select timesheets, and select “Adjust Salaried Costs”. The modal that displays gives a preview of the timesheets selected, and shows whether they are considered complete, incomplete, not evaluated for completeness, or ineligible for adjustment.
Admins can download a preview of what the hourly cost rates will be for these timesheets after adjustment, to make sure that they are ready to take that action. It is important to double check timesheets that are incomplete. Timesheets with only a few hours entered will result in very high hourly cost rates after adjustment.
Once you’ve reviewed the cost rate preview report, select the categories of timesheets you would like to adjust, and click “Adjust Costs” for ClickTime to distribute the cost per timesheet across the timesheet’s hours.
You'll see a success message:
and if you scroll over the "dollar sign" icon a pop-up message will confirm "Timesheet Cost Adjusted".
The new Cost Rates will now be included in any cost-based reports. In this example, we see that Jim's 40 hours of worked time does equal their weekly timesheet:
If the numbers do not look correct, check your Salaried Costs. If needed, Administrators can update Cost Rates and re-run the cost adjustment to update the values though.
Cost Rates are similar to Billing Rates in that each time entry someone makes includes a built-in Cost Rate. Whatever that person's Cost Rate is when they last save the time entry will be hard-coded to that time entry. We can see this in our reporting tools - here is an example from the Customizable Data Export:
It's assumed that Cost Rates will change periodically, which you can do at any time on the Person Details page by simply editing the Cost Rate field, entering the new value, and saving. All time entries saved after that change is made will be coded with the new Cost Rate.
In some situations, you may need to apply the new Cost Rates to time entries that already exist in the system. ClickTime allows you to do this for time entries that are part of an "open", "waiting for approval", or "rejected" timesheet. To do so, go to edit the Cost Rate and then indicate you'd like to "Apply the cost rate to all new and existing unlocked time as far back as..." by checking the box and selecting a date.
When you click "Update", you'll see a pop-up window asking you to confirm that you'd like to apply these changes back to the date you specified.
Changing Cost Rates for existing time entries can take up to 5 minutes (but will typically not take more than a minute or two, depending on how many entries are being changed). Click "Save and Continue" to confirm you'd like to change existing Cost Rates for the dates specified.
Please note:The change will only be applied to time entries that belong to unlocked/unapproved timesheets. If you wish to change the Cost Rate for time entries for a locked/approved timesheet, please first un-lock or undo approval of the timesheet. You can also reject the timesheet, although that will generate an email to the employee. After the changes have been applied, you can re-lock/re-approve the timesheets.
After confirming the changes, you'll see an icon in the top-right corner next to your name letting you know the system is changing Cost Rates.
When it is finished the message will disappear and you'll see confirmation that the details have changed for that employee. For best results, please allow this process to finish before moving on to change any other Cost Rates.
When Cost Rates are changed, you should be able to confirm these changes took place by re-running any reports that include Cost Rate data.
Everyone with Administrative access to ClickTime will be able to see Cost Rates on the Person Details pages, as well as in our reports. Managers can be given access to "View" as well as "Add & Edit" Cost Rates on person-by-person basis - this is set in the "Security and Permissions" section of their Person Details page here:
If a Manager can "Add & Edit" People, but not "View" Cost Rates, they will not see the "Cost" section of the Person Details page.
If they can view, but not "Add & Edit", they'll be able to see the field, but not make any changes (as explained above).
If a Manager has access to "Run Reports" but not to "View" Cost Rates, they will not see columns with Cost Rates in any of the reports.
In order to use reports in ClickTime that include "Profitability", you must have accurate Billing Rates and Cost Rates in the system. Here is the "Profitability Summary" report (available in the Project section of the Company --> Reports page):
ClickTime calculates Profitability by subtracting Total Cost from the Billable Amount. This is determined using the following formula:
- Billable Amount = Billing Rate of time entries multipled by the number of hours in the report criteria
- Total Cost = Cost Rate of employee multiplied by the number of hours worked by the employee
As mentioned earlier, Cost Rate is the approximate Hourly Cost, so while ClickTime data can populate invoices / payslips, this information is for estimation purposes only.