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Time and Budgets

  • 10 August 2021
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Userlevel 5
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How do others use time and budgets? I’ve been using the timesheet function since April and staff love the timer feature - but I’m not sure on how to do the budgets and would like to understand it better. At the moment, all of our jobs are showing as being over budget.

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Best answer by Gary Wood 20 August 2021, 02:21

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Hi Coral, Evan from Karbon here! This is a great question, and I think many others are pondering as well. I do hope some others will chime in with their own use cases since every firm is different, but I wanted to quickly share Karbon’s perspective on this in case it’s helpful.

 

The current ability to setup budgets and compare vs actual time entries is really just part 1 of a larger plan that includes capacity/scheduling and billing. The value of what’s been released now may be harder to appreciate without that context.

 

Our hope is that people will start taking the time now to incorporate budget estimates into their work templates (see last video in this course for example) because doing so might take some firms a little while to setup. Then, likely a few months of testing and tweaking to fine tune your methodology for budgeting, and validating that you’re dialed in. If your budget assumptions are consistently way off, it will mess with any future capacity planning exercises, as well as forecasting billing profit margins.

 

Right now, if you don’t have estimates setup, your budget is basically “0” and so yes, any time at all tracked against it will make you look over budget. And for folks who just want to log time for purposes of payroll or their own manual billing process that may be just fine. But, there is definitely an opportunity (present and future) to start building in those budget estimates on your templates and repeating work items.  

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Thanks. That video definitely has given me food for thought and I’ll share with my team member so she can support me going forward.

We’ll start with incorporating this in to our templates - I’ve wanted to do this for a while and didn’t know where to start!

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Hi Coral,

We input a budget as a part of our precommencement tasks in each work item. Before the work can begin, the accountants tell us how much time they believe the job will take and we input it into a spreadsheet based on our average percentage of time for each staff member.  From there we input it into the budget section of the work item.

This has been extremely useful for us in our first year of using Karbon as we now have fantastic visibility across which clients take more time than we initially thought, and which clients tend to be super efficient and we've been able to adjust our billing and capacity planning accordingly.

I hope this helps!

Cas

Userlevel 7
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Hi Coral,

We input a budget as a part of our precommencement tasks in each work item. Before the work can begin, the accountants tell us how much time they believe the job will take and we input it into a spreadsheet based on our average percentage of time for each staff member.  From there we input it into the budget section of the work item.

This has been extremely useful for us in our first year of using Karbon as we now have fantastic visibility across which clients take more time than we initially thought, and which clients tend to be super efficient and we've been able to adjust our billing and capacity planning accordingly.

I hope this helps!

Cas

We so something similar before the work starts. 

First we have set up the billable rates for each role and each team member has been identified by their role in Karbon. 

When we set up the work orders we add the budget by assignee, distributing the fee we are charging across the work orders.  We can see pretty quickly if we are charging an appropriate fee once the budges are set up for each work order in the engagement.  When we switched to value pricing this was key to evaluate how we were doing.

We also get visibility on the capacity for each individual team member as well as the team.  Forecasting capacity helps us serve our clients better and look after our team members.

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Perfection impedes progess - so don't let choosing a time budget slow your progress towards applying time budgets to all work. When you are first getting started, try picking a time budget quickly without over analyzing. Apply time budgets of 1 hour, 2 hours, 4 hours, or 8 hours. Like a multiple choice question. You can refine to more precise time budgets after you complete the work for a few cycles. That refinement will make your time budgets more real.

If you try to perfect time budgets in the beginning, you will never get the plane off the ground ✈️

 

⭐⭐⭐⭐⭐

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