We will be updating how the Effective Hourly Rate is calculated and how Charges in Other Expenses (Other Charges) are recognized as project revenue in fixed-price projects.
Specifically, when project rates are present in a fixed-price project, we will be decoupling Other Charges from the Effective Hourly Rate calculations for Project Revenue.
Calculation logic before 3rd August, 2026
Project Revenue (Billable Hours + Other Expenses) always equals Project Budget. When selecting a period to report revenue on, we use the effective hourly rate to determine what revenue to recognize for that period.
Effective Hourly Rate is calculated using the Project Revenue (Billable Hours + Other Expenses Charges)/T & M Benchmark.
Project Revenue disregards the date of the Other Charge and simply factors it into the Effective Hourly Rate.
In the screenshot below, the Other Charges of $5,000 are factored into the calculation of the Effective Hourly Rate. Although the $5,000 Other Charges are added to a future date, the Future Revenue driven by the Other Charges recognized is only $3,138, because the effective hourly rate is used to calculate the future revenue:
Calculation logic after 3rd August, 2026
When Project Rates are present, total Project Revenue equals Project Budget.
For a given period, Project Revenue will continue to be Revenue based on Billable Hours + Other Charges.
However, the Effective Hourly Rate will now be calculated using ONLY Revenue based on Billable Hours/ T&M Benchmark. Other Expenses (Other Charges) will be accounted for separately on the date they occur.
In the screenshot below, the $5,000 Other Charges added to a future date is fully recognized as revenue in the future. The Effective Hourly Rate no longer applies to the Other Expenses.
In addition, the total Project Revenue does not equal the Project Budget under the following conditions:
When all Project Rates are $0 and Other Charges are present, the Project Revenue equals the sum of Other Charges instead of the Project Budget.
When the sum of Other Charges exceeds the Project Budget, the Effective Hourly Rate will be set to $0 even when project rates are present, and the total Project Revenue equals the sum of Other Charges instead of the Project Budget.
Why did we make these changes?
Many customers have requested we recognize Other Expenses (Other Charges) on the date they incur - especially if using this to add ad-hoc expenses.
This will more accurately reflect revenue earned due to billable hours in a period by calculating the rate based on labour work and not other expenses.
This will align with how Time & Materials Project recognize Other Expenses Charges
This will allow for Milestone Revenue Recognition for Fixed Price in all date range or period reports
This will allow mixed budget types- like billable hours + retainer
Who will be affected?
Customers who have Fixed Price Projects with Other Expenses (Other Charges) and Project Rates (if the T&M Benchmark & Project Revenue are different)
Dashboards
If your T& M Benchmark and Project Revenue are different, you'll likely see a slight difference in the Revenue Tab- Future & Past.
Tab: Revenue
Fields: Effective Hourly Rate, Other Charges, Totals
Reports
Project Reports
Column: Project Revenue
Dates: Date Range & Period
Conditions: T&M Benchmark and Project Revenue are not the same
Rows: Summary, Individual People
(In screenshot below: Left - Before; Right - After)
People
Column: Project Revenue
Dates: Date Range & Period
Conditions: T&M Benchmark and Project Revenue are not the same
Rows: Summary, Individual Project
(In screenshot below: Left - Before; Right - After)
What historical data will be affected?
This is a system-wide change- a correction in our calculation logic. Only a small subset of customers will be affected, and most reporting will look the same, with only slight changes in specific periods.
Not all reports or dashboards that are Fixed Price with Other Expenses will be affected - ONLY those where the T&M Benchmark and Project Revenue are not the same will see changes in the revenue figure.
(In the screenshot below, there are no changes in Project Revenue: Left - Before; Right - After)
Renamed Effort Metrics in Reports
To make workload reporting clearer, we’re also renaming some existing workload metrics (column names).
Before | After |
Under Effort > Total |
|
Total | Total (Forecast) |
Scheduled Total | Scheduled (All) |
Actual Total | Actual |
Under Effort > Billable |
|
Billable | Total (Forecast) |
Scheduled Billable | Scheduled (All) |
Actual Billable | Actual |
Under Effort > Non-Billable |
|
Non-Billable | Total (Forecast) |
Scheduled Non-Billable | Scheduled (All) |
Actual Non-Billable | Actual |
These changes are naming updates only and do not change how the renamed metrics are calculated.
New Effort Metrics in Reports
We’re also adding two new workload metrics to Reports:
Pending Actuals — scheduled hours on the dates when scheduled hours are present but there are no corresponding actual hours logged (incomplete timesheets). Also known as missing actuals.
Scheduled (Future) — shows scheduled hours from today onwards.
These metrics make it easier to view the breakdown of the Total(Forecast) Hours:
If you have any questions, please use the chat option in your account or contact us at help@runn.io.