Edition: Professional, Business, Enterprise
User-level: System Administrator (for set up)
Previous steps: Financial controls, Rates and Rate Groups
A standard cost is automatically calculated for each staff charge-out rate and inspection rate.
The purpose of the standard cost is to provide a cost rate that project managers can budget to, without sharing any core financial information about a staff member
The standard cost is calculated as the charge rate less the target margin % set in the financial controls. A charge rate can't be discounted below the standard cost and still make a profit.
Standard cost formula
The formula used to calculate the standard cost is:
(Charge per unit) / (1+(Target profit / 100)) = Standard cost per hour
Examples:
Charge rate per unit | Target profit | Standard cost |
$100 | 25% | ($100) / (1 + (25/100)) = $80 |
$100 | 30% | ($100) / (1 + (30/100)) = $76.9 |
By default, Synergy sets the target profit for the organization to 25%. This can be updated in the financial controls.
Where to next?
What other features does this relate to?