Calculate cost per hour for consultant | Free template

Calculate cost per hour for consultant is a free template to calculate cost per available practical hour, to calculate the break even volume, to calculate the break even revenue and to calculate profit based on budgeted billing rate.

Calculate cost per hour for consultant can be used as a basis for pricing decisions and as a basis to assess profitability at different levels of billing rate. This template is suitable to use as a preliminary calculation to make an analysis of profit or a break-even analysis for the number of working hours that must be chargeable to achieve profitability. The template is also ideal as an evaluation calculation for assessing the profitability and capacity utilization as measured by billing rate. In an evaluation calculation the template can be a basis for capacity decisions.

Calculate cost per hour for consultant is based on a consulting business's total costs to be billed to customers through an hourly rate. Any disbursements or expenses made on behalf of customers and that are invoiced separately are excluded from the calculation. The total cost in the consulting business is divided by practically available capacity in hours for the business consultants. Practical available capacity differs from the theoretically available capacity in that there are breaks, communication, training and meetings that do not constitute chargeable time. The theoretically available capacity in hours is adjusted by an adjustment factor to obtain the practical available capacity. A default value for this adjustment factor is 80-85% but the size of the adjustment factor depends of course on the specific conditions in the industry.

The reason for using the practical available capacity rather than the actual capacity utilization in hours is that pricing should be competitive and to get an idea of how much of the available capacity is utilized.

In this template to calculate cost per hour for consultant spreadsheet the cost per hour, contribution margin per hour and the contribution margin in percent are calculated. If you use this template, you can calculate the bread even volume, break even revenue, and the billing rate required for a profit of zero. In the template, you can enter the budgeted billing rate and then the expected annual profit and the expected annual revenue are calculated. You can also see the profit in a graph that shows profits at different levels of billing rate. Updated: 01/01/2015 | Created by All-templates.biz

Download Calculate cost per hour for consultant | Free template »

Tags: pricing management control excel