Ruddr offers two distinct types of budget options: an overall budget and a monthly budget. An overall budget is the budget for the entire project while the monthly budget establishes a financial baseline for each month. In order to set up a budget, you must have access to the project and also have the Edit project permission set on your security role.
A budget allows you to plan out the hours, revenue, expenses, and other billable items that you expect over the course of the entire project or for each month of the project. You can break the hours and expenses out into their billable and non-billable components. Additionally, when you a Target Services Gross Margin on the Financial Budget Summary, Ruddr will calculate additional cost, profit, and margin budgets based on this desired services gross margin for the project.
Setting up a budget at the outset of a project is a highly-recommended best practice. Once your budget is created, you can monitor your performance against the budget from the project dashboard.
For visibility into a project's budget, a project's Project Admins and the Client Relationship Owner of the associated client can be notified via email when the project hits or exceeds a specified percentage of the project's hours and / or services revenue budget. This is accomplished through budget notification settings on the project's Budget tab.
Create an Overall Budget
To turn an overall budget on for your project, simply click the Track overall budget checkbox within the Settings section (Figure 1) of the Overview tab of the Edit Project drawer.
Figure 1 - Turn on an Overall Budget for Your Project in the Settings section of the Edit Project Drawer
Once you check this checkbox, a new Budget tab will show at the top of the drawer. The first step in building out your budget on the Budget tab is to select one of the three budget model options:
Summary Budget
The quickest and simplest way to create a budget is to use a summary budget (Figure 2). A summary budget allows you to type in planned overall figures for services revenue, billable hours, non-billable hours, billable expenses, non-billable expenses, and other items (such as products).
Figure 2 - Provide a Summary Budget for the Project
Using a summary budget can be ideal if you handle your project estimation and budgeting outside of Ruddr. Rather than duplicate that budgeting work within Ruddr, you can simply type in the final budget figures. If you aren't using an external tool for budgeting, it is recommended that you use one of the two detailed budget options described below.
Note that in this section you can elect to have project budget notifications sent.
Detailed Budget
Choosing the standard, detailed budget allows you to provide more granular data than the summary budget option.
Hours and Services Revenue
For each role or member on the project team, you specify the number of planned billable hours and non-billable hours (Figure 3). For time and materials projects, the budget revenue is automatically calculated per role/person and included in the summation of hours and services revenue for the project.
Figure 3 - Create a Hours and Services Budget
Note that at the bottom of the detailed budget you have options to cap the project's services revenue to the budget or cap the billable and non-billable hours to the budget. These setting will help you ensure that the project does not go over the revenue or hours budgets.
Checking the Cap the services revenue checkbox will prevent time entries for the project from being saved if the time will cause the project to exceed its services revenue budget.
Checking the Cap the billable and non-billable hours checkbox will prohibit time entries for the project from being saved if the time will cause the project to exceed the billable or non-billable hours budget.
Note that in this section you can also elect to have project budget notifications sent.
Expenses
For the expense budget (Figure 4), you click the + Quick Add button to add a new expense category to the expense budget. For each row in the budget, provide the total planned billable and non-billable expense dollar amounts for the expense category. Workspace Admins have the ability to add, edit, and remove expense categories from the workspace settings area.
Figure 4 - Create an Expense Budget for the Project
Note that you can also choose to Cap the billable and non-billable expenses by checking the checkbox at the bottom of the Expenses section. This will prevent an expense item for the project from being saved if it will cause the project to exceed its billable or non-billable expense budget.
Other Items
In addition to budgeting for hours, revenue, and expenses, you can also budget for Other Items (Figure 5). Other items are often products or materials that you sell to your customers alongside the delivery of your services project. If your company buys products (such as software licenses) wholesale and then resells those products to clients, you would budget for those items in this section.
Figure 5 - Create a Budget for Other Items
Detailed Budget from Aggregated Tasks
When a detailed budget is aggregated from the project's tasks, this means that the billable and non-billable hours per role are automatically calculated from the set of tasks defined on the Tasks tab of the project dashboard. This can be thought of as a "bottoms up" budget in which you define the work at a task level and the budget builds itself.
When using the aggregated budget option, it is imperative that all project work be captured within a task. If there is project work not reflected in a task, the aggregated budget figures will be lower than they should be.
With an aggregated budget, the expense and other items budget areas on the Budget tab remain and are available just as they are when creating a detailed budget.
When a task does not have member / role assignments, the task's hours budget or services revenue budget is included as part of a "Unassigned" role budget on the project budget. This ensures that all budgets for tasks are represented on the project's Hours and Services Revenue budget (Figure 6).
Figure 6 - Task Budgets that Lack Role / Member Assignments are Designated as Unassigned on the Project Budget
Note that you can also elect to have project budget notifications sent for this project.
Financial Budget Summary
As you build your project budget, the total revenue budget (Figure 7) will be calculated from the services, expenses, and other items totals that you specify, and will be displayed as part of the Financial Budget Summary (Figure 7). For Fixed Fee projects, you will want to ensure that your Fixed Fee Billing Schedule equals the total billable budget represented here.
Figure 7 - Total Revenue Budget Table Aggregated from Budget Items on Budget Tab
Target Services Gross Margin
In addition to tracking a total revenue budget, Ruddr will calculate cost, profit, and margin budgets, all of which can be tracked in addition to revenue. In order for Ruddr to calculate and provide these budgets, you will need to provide a Target Services Gross Margin value in the Financial Budget Summary (Figure 8).
Figure 8 - Provide a Target Services Gross Margin to Track Additional Project Budgets
This desired margin percentage will be used by Ruddr to determine the following, additional budgets:
- Labor Cost
- Services Gross Profit
- Total Cost
- Total Gross Profit
- Total Gross Margin
These budgets are all visible on the Project Progress graphs on the Project Dashboard.
Note that providing a Target Services Gross Margin is not required in order to establish a revenue budget -- you can save a project budget without providing this target.
Monthly Budget
A monthly budget is useful when you need to manage a project to a certain amount of time, expenses, and fees per month. You can use both an overall budget and a monthly budget on the same project. To turn on the monthly budget, check the Track monthly budget checkbox in the Settings section (Figure 9) of the Edit Project drawer.
Figure 9 - Specify that a Monthly Budget is to be used on the Project
The monthly budget process is identical to the overall budget process described above except that the monthly budget only has two available budget model options which are Summary budget and Detailed budget. A monthly budget cannot be aggregated from tasks because tasks are not set up on a monthly basis.
To set a monthly budget once you have specified that the project should use one, select Monthly Budget from the dropdown (Figure 10) at the top of the Budget tab of the Edit Project drawer.
Like with the Overall Budget, you can check the Cap the billable and non-billable hours checkbox to prohibit time entries for the project from being saved if the time will cause the project to exceed the monthly billable or non-billable hours budget.
Figure 10 - To Set a Monthly Budget, Switch Views on the Budget Tab Using the Dropdown
Project Budget Notifications
When setting the project budget, you can specify whether or not you would like to send out project budget notifications via email. These notifications can be sent for the hours budget, the revenue budget, or both. When the project budget notifications are enabled, the project's Project Admin and the Client Relationship Manager for the respective client will be notified via email (Figure 12) when the project hits or exceeds the specified budget percentage denoted when the setting is enabled. Additionally, a follow-up notifications will be sent to both parties when the budget hits or exceeds 100%.
Each budget option - Summary, Detailed, Detailed Aggregated from Tasks - will have options (Figure 11) for setting up project budget notifications. When enabled, you can also specify the percentage at which you wish for the notifications to be sent.
Figure 11 - Elect to Send Budget Notifications to Project Admins and Client Relationship Owners
Figure 12 - Project Admins and Client Relationship Owners can Receive an Emailed Budget Notification