New Year, New Rates: How to update your Billing and Cost Rates for 2020

Billing Rates:

First, take stock of where you are. Go ahead and run a Rate Card report. Check the rates for your team against what they should be, and correct any discrepancies. You can also make those changes retroactive in ClickTime to whatever date they became effective.

Thinking of raising rates? A new year is the best time to announce rate changes. Perhaps you’ll consider an across-the-board increase to offset increased costs or wages. Or maybe there have been adjustments to the prevailing rates in your region or among your competition and it’s time to readjust. Or you’ve got specially-negotiated rates for individual clients which need to be adjusted to reflect an agreement in place.

Be upfront and clearly communicate rate changes. Early January is the perfect time to send a newsletter or bulletin to your clients and partners, announcing: shifts in personnel, recent company news, and a notice that your rates will be changing.

Cost Rates:

ClickTime includes the feature to track the estimated internal cost of each hour logged in the system. That cost rate is individual by the employee, and you’ll adjust this rate as often as you like. If you’re doing year-end raises, you’ve got bonuses to amortize in your hourly costs, or you’ve just been lax about updating your team’s rates in ClickTime, now is the perfect time to make adjustments.

In the People list under the Company tab, you can include a column for Cost Rate.

Scan your list of employees and their cost rates. You can also export this list as a spreadsheet.

Compare this to your fully-loaded cost rate for each person. A simple way to compute this is:

(annual wage + overhead) / hours worked per year

You’ll find a handy calculator inside ClickTime for making this calculation easier. Make any adjustments where the rate in ClickTime has fallen out of alignment with the actual costs.

With both billing rates and cost rates updated for 2020, you’ll start the year maximizing your profitability and reporting accuracy.