I want to... see whether my projects are profitable
Analyzing an individual project’s profitability won’t just show you how that project fared—it’ll also give you valuable insights into your business’s overall health. By looking closely at one project, you’ll be better equipped to set up future projects—and your whole team—for long-term success.
Want an in-depth look at creating projects? Check out our article on understanding the 3 project types.
Setting up your projects to utilize Harvest's profitability report
The profitability report, available to Administrators in accounts on our Premium plan from Reports > Profitability, allows you to report on profitability at the company, client, project, task, and team level.
To use the profitability report, you’ll need to make sure your projects are created with all of the data necessary for us to calculate profitability. Here’s how to set up all the necessary data points.
1. Enter each teammate’s cost rate
The cost rate is your internal rate—what a teammate costs your business. Once you set a cost rate in each teammate’s profile, Harvest will multiply their tracked hours by that cost rate for each project.
2. For Time & Materials projects, choose and set your billable rates
The billable rate is the external rate you charge your client. You’ll choose the rate type and set the amounts when creating or editing a project.
Harvest multiplies each time entry by the applicable billable rate to give you total billable amounts for each Time & Materials project. By making time tracking a habit, you’ll get a real-time view of your projects’ potential income.
3. For Fixed Fee projects, set fee amounts and start and end dates
The fee amount for a Fixed Fee project is the amount you expect to bill your client for the project. You'll need to set the fee and start and end date for your Fixed Fee project if you'd like us to calculate the profitability for your Fixed Fee project.
Use the Project Analysis page to keep your project on track
If your plan does not have access to the built-in profitability report, each project's analysis page can be helpful for viewing profitability at the project level.
When it comes to both tracking your progress mid-project and analyzing how you did afterward, the project analysis page is a one-stop shop. To view a project's analysis page, go to Projects, then click on the name of the project.
If you set a budget, you can easily monitor your progress as your team tracks their time to the project. Budget features like the project progress graph eliminate the guesswork about when and where you need to make adjustments as you go.
Once your team has wrapped up work on a project, profitability can be analyzed by manually subtracting your costs from the pre-tax invoiced total.
The Invoices tab at the bottom of the project analysis page will show the pre-tax total that you’ve invoiced for the project so far. From that invoiced total, manually subtract the total Internal costs, shown just above the Invoices tab. These costs will also include any expenses your team has entered.
In the below example, you can take $24,659.08 (pre-tax invoiced total) and subtract $15,431.08 (total internal costs) to manually calculate an estimated profit of $9,228.
Plan your next project based on what you’ve learned
In addition to helping you assess profitability, the project analysis page offers crucial knowledge about how to set up future projects for success, too.
Using the Tasks and Team tabs, you can easily review exactly where your teammates spent most of their time—and the costs associated with each person and task. That way, you can see at a glance where you spent money as expected, and where you may need to switch gears on the next project.
And if cutting costs isn’t an option, you can always use this data to change how you price your next project—such as by increasing your billable rates.
Ready to try some of these things yourself? Go to https://id.getharvest.com to access your account.