The value of work delivered (at bill rates) is the best measure of progress. Why you’d choose it:
- Accounts for differences in bill rates across roles
- Aligns progress with customer-facing value, not just effort or cost
- Useful when:
- Pricing varies significantly by role
- You want progress tied to revenue-generating value
- Often closest to how work would be valued in a T&M model
- Is a good option when member costs are not available
Before you start
Make sure your project includes:- A Services Revenue Budget
- Bill rates defined for each project member or role
- A detailed budget with billable hours for each role or member
How the T and M value is calculated
Ruddr calculates the project’s budgeted T&M revenue using:- Budgeted billable hours × bill rate (for each role or team member)
How this method works
Ruddr recognizes revenue based on how much T&M value has been delivered relative to the total projected T&M value. At a high level:- Track T&M revenue generated to date
- Estimate total projected T&M revenue
- Calculate percent complete
- Recognize revenue based on that percentage
How Ruddr calculates revenue
For each recognition period, Ruddr:- Calculates T&M revenue to date
- Determines total projected T&M revenue as the greater of:
- Budgeted T&M revenue
- Past T&M revenue + future forecasted T&M revenue (if using allocations)
- Calculates percent complete
- Calculates total revenue earned to date
- Subtracts previously recognized revenue to determine the current period entry
Key formulas (reference)
Budgeted T&M revenueSum of (Budgeted hours × bill rate) for each role or member Percent complete
T&M revenue to date ÷ Total projected T&M revenue Total projected T&M revenue
The great of Budgeted T&M revenue and (Past T&M revenue + future forecasted T&M revenue) Revenue earned to date
Percent complete × Fixed fee services revenue budget Revenue for current period
Revenue earned to date − Previously recognized revenue
How automation works
If automated revenue recognition is enabled:- Runs weekly or monthly
- Monthly runs create entries for the previous month
- Weekly runs create entries for the prior week
- If using allocations:
- Future forecasted entries are created
- Forecasts are refreshed each run
Example 1: Project progresses as expected
This example shows standard behavior when projected T&M revenue does not change. Project setup:- Fixed Fee Services Revenue Budget: $120,000
- Budgeted T&M Revenue: $160,000
- Monthly automation enabled
Month 1
- T&M revenue to date: $32,000
- Percent complete: 20%
- Revenue earned to date: $24,000
- Revenue recognized: $24,000
Month 2
- T&M revenue to date: $80,000
- Percent complete: 50%
- Revenue earned to date: $60,000
- Previously recognized: $24,000
- Revenue recognized: $36,000
Month 3
- T&M revenue to date: $120,000
- Percent complete: 75%
- Revenue earned to date: $90,000
- Previously recognized: $60,000
- Revenue recognized: $30,000
Month 4
- T&M revenue to date: $160,000
- Percent complete: 100%
- Revenue earned to date: $120,000
- Previously recognized: $90,000
- Revenue recognized: $30,000
Summary table:
| Month | T&M Revenue to Date | Projected Total T&M Revenue | % Complete | Revenue Recognized Through Period | Current Month Rev Rec |
|---|---|---|---|---|---|
| 1 | $32,000.00 | $160,000.00 | 20.00% | $24,000.00 | $24,000.00 |
| 2 | $80,000.00 | $160,000.00 | 50.00% | $60,000.00 | $36,000.00 |
| 3 | $120,000.00 | $160,000.00 | 75.00% | $90,000.00 | $30,000.00 |
| 4 | $160,000.00 | $160,000.00 | 100.00% | $120,000.00 | $30,000.00 |
Summary
- Revenue follows progress based on delivered value
- Each period recognizes the incremental earned amount
- Total revenue = $120,000
Example 2: Total forecasted T and M revenue increases
This example shows what happens when projected T&M revenue increases during the project. Project setup:- Fixed Fee Services Revenue Budget: $120,000
- Original Budgeted T&M Revenue: $160,000
- Monthly automation enabled
- Project uses allocations
What changes?
In Month 3, projected T&M revenue increases because:- Past T&M revenue + future forecasted T&M revenue exceeds the original budget
max(Budgeted T&M revenue, Past + future forecasted T&M revenue)
Month 1
- T&M revenue to date: $32,000
- Projected revenue: $160,000
- Percent complete: 20%
- Revenue earned to date: $24,000
- Revenue recognized: $24,000
Month 2
- T&M revenue to date: $80,000
- Projected revenue: $160,000
- Percent complete: 50%
- Revenue earned to date: $60,000
- Previously recognized: $24,000
- Revenue recognized: $36,000
Month 3 (projected revenue increases)
- T&M revenue to date: $120,000
- Projected revenue: $180,000
- Percent complete: 66.67%
- Revenue earned to date: $80,000
- Previously recognized: $60,000
- Revenue recognized: $20,000
Month 4
- T&M revenue to date: $180,000
- Projected revenue: $180,000
- Percent complete: 100%
- Revenue earned to date: $120,000
- Previously recognized: $80,000
- Revenue recognized: $40,000
Summary table: projected T and M revenue exceeds budget in Month 3
| Month | T&M Revenue to Date | Future Forecasted T&M Revenue | Projected Total T&M Revenue | % Complete | Revenue Recognized Through Period | Current Month Rev Rec |
|---|---|---|---|---|---|---|
| 1 | $32,000.00 | $128,000.00 | $160,000.00 | 20.00% | $24,000.00 | $24,000.00 |
| 2 | $80,000.00 | $80,000.00 | $160,000.00 | 50.00% | $60,000.00 | $36,000.00 |
| 3 | $120,000.00 | $60,000.00 | $180,000.00 | 66.67% | $80,000.00 | $20,000.00 |
| 4 | $180,000.00 | $0.00 | $180,000.00 | 100.00% | $120,000.00 | $40,000.00 |
Why revenue decreases in Month 3
If projected revenue had stayed at $160,000:- Percent complete = $120,000 ÷ $160,000 = 75%
- Revenue earned to date = $90,000
- Percent complete = $120,000 ÷ $180,000 = 66.67%
- Revenue earned to date = $80,000
Key takeaway
When projected T&M revenue increases:- Percent complete decreases
- Revenue is spread across a larger total value
- Current period revenue may be lower than expected
Important: projects with allocations
If your project uses resource allocations:- Projected T&M revenue can increase during the project
- This happens when:
- Future work has higher value than originally planned
- Revenue recognition adjusts automatically
- Earlier expectations may shift based on the new projection