Scaled Cost Rates are a modified version of the cost rate.
They effectively scale back the cost rate across an excessive number of hours instead of using the default required units per timesheet. The value of work will be spread over more hours, which in turn changes how you look at recoveries and employee margins.
If you are using AbtracOnLine reports for KPI’s it’s possible to balance reporting by looking at scaled cost rates.
Scaled Cost Rates example
Here’s how scaled cost rates work:
If someone’s internal cost is $110.oo per hour for a 40 hour week but they worked a 50 hour week, then for the three reports above (after the timesheet is entered and committed) a scaled cost rate will adjust the hourly cost rate on each entry by the ratio of 40/50. The value of work will be spread over 50 hours instead of the 40.
How scaled cost rates are calculated
Scaled Rate = (Required Hours/Hours Worked) x Cost Rate
(40.00/50.00) x $110.00 = $88.00
How scaled cost rates change the value of employee time spent on a project
When using scaled rates the $5,500 value of work will be spread over 50 hours instead of the 40. So the cost to the project changes.
| Value of Employee Time ( Using Cost Rate) | Value of Employee Time (Using Scaled Cost Rate) |
| = Hours worked x Rate | = Hours worked x Scaled Rate |
| = 50.00 x $110.00 | =50.00 x $88.00 |
| = $5,500 | = $4,400 |
Reports that use scaled cost rates
The following reports in Abtrac include an option for scaled cost rates:
- Invoice Listing
- Invoices vs Time and Disbursements by Project
- Fees & Cost by Employee, Client & Project
Invoice Listing Report
Invoice Listing Report – Cost Rate c.f. Scaled Cost Rate
Invoices vs Time and Disbursements by Project
Invoices vs Time and Disbursements by Project – Cost Rate c.f. Scaled Cost Rate
Fees & Cost by Employee, Client & Project
Fees & Cost by Employee, Client & Project – Cost Rate c.f. Scaled Cost Rate
Abtrac KB# 2071