This section will cover how to assemble your budget along with labor and equipment pricing using our provided budget template spreadsheet. Your budget(s) are entered into Manage360 under a Division. The Division is the central hub for a lot of settings related to pricing, estimating, and job tracking; your overhead markup settings, default profit margins, default markups for warranty & labor burden are all stored here, to name just a few.

Budget Spreadsheet

You should have received a copy of this spreadsheet when you signed up – if you need a new copy, please email support@dynascape.com. This document consists of four separate tabs. The first tab is the budget template and is how we collect the values compromising your budget. The last three tabs are worksheets that assist in generating accurate values for labor and equipment costing. The Labor Cost tab allows us to define an average hourly wage for a specific type of employee. The Crew Cost tab is where you define the crew types you wish to use in DS|Manage360 and define a crew average wage cost. The equipment cost tab breaks the cost of your equipment down into three sections and allows you to come up with your total cost per hour for your equipment.

The Budget Template #

The budget template is where you define your different divisions for use in DS|Manage360 and enter your budgets. Its design reflects how DS|Manage360 tracks your budget by breaking your costs down into categories for materials, plants, labor, subcontracting and equipment, recording your total revenue (gross sales) as well as accounting for your overhead expenses. The total sum of these categories is important for this spreadsheet. Because of this, you need not fill out all of the “sub-categories” as they essentially function as a worksheet for allowing you to generate your total labor burden or overhead costs.

NOTE: This tab has a few cell-dependent equations, so care must be taken when inserting or removing cells.

The first section of this spreadsheet is for entering all of your non-overhead related costs. The next section is for recording your overhead, and contains a list of common overhead expenses. After this, we have an area called overhead recovery percentage. The last part, labeled ratios, lists a few industry standard values for your different costs as a percentage of total sales.

The following tabs contain values required for entry into DS|Manage360 as they are all important factors in cost-based estimating. Your cost projections are the driving factors behind Overhead Recovery and unit pricing, and having accurate average wage costs are important for determining labour costs on your Estimates. Providing detail for your equipment costs and Costbook items helps determine what you charge for these items, in conjunction with your budget setup. Incorrect values in these sections decrease the accuracy of your estimates and thus what you end up charging the client, which have consequences such as failure to recover all of your Overhead costs for the year. From the Budget Template tab your Gross sales as well as your total costs for Materials, Plants, Subcontractors, Equipment and Overhead are all required. Also required are your labour costs, broken down into your cost of Direct Labor and your Labor Burden Total.

Labor Cost Tab #

Because labor in DS|Manage360 is estimated in total man-hours and because it may not be immediately ascertainable which employees will eventually work on that job, labor is defined as an average wage cost of similar employees. The purpose of this tab is to assist in realizing that average wage cost.

This tab takes the total working hours per employee type and accounts for any time for which they are being paid but not doing work which is billable to the client (e.g. driving to a site). It takes this value and marks up the average wage (which must be independently determined) to give you a total productive hour cost.

Finally indirect labor costs (pensions, workman’s comp) are accounted for to deliver the total hourly labor cost for each employee type. This value is highlighted in green, and will need to be copied on to the next tab (Crew Cost). The Total Labor Cost per Hour is needed to calculate the average wage cost of one of your crews, so that crew cost value can be implemented into DS|Manage360 to assist with labour pricing on estimates.

Crew Cost Tab #

This tab is a worksheet that allows you to define the types of crews you would like to use in your estimates and generate a crew average wage cost for each crew type. Taking the average labor costs by worker type, you design a crew and it outputs the total hourly crew cost based upon the crew’s composition.

For example, a 3-man construction crew consisting of one foreman and two laborers would account for the differing wages of each employee type and average them out. Once you have found your crew cost, DS|Manage360 will assist in generating a Unit Price based upon your Overhead Recovery values, Profit Margins and Labour Burden Percentage.

Not all distinct crews are required here as similar crews typically have an average wage that is similar and we are trying to determine an overall average to use when for estimation. Additional crew types can be added if it a specialized crew with a significantly different cost. For example, there may be entries for a Maintenance type crew and a Construction type crew if different rates are charged for those activities. The Crew Average Wage Cost is the only value required for entry into DS|Manage360 from this tab.

Equipment Cost Tab #

In the equipment cost spreadsheet we are interested in generating the total cost per hour per piece of equipment. We break the total cost of your equipment into acquisition, fuel and maintenance costs. In the first section, you must estimate how long you intend to keep the equipment for, its turn-in value and the amount of hours you will get out of it while you have it to properly generate the hourly cost of acquisition. The next section is for maintenance costs on that equipment which must also be estimated. A few common types are listed (brake/clutch repairs) with a few extra rows for you to enter your own values. This generates your total hourly cost of maintenance. The next section requires you to estimate your fuel costs over the vehicle’s lifetime to give an hourly fuel cost. The spreadsheet then takes the sum of these three cots to give you your total hourly equipment cost for you to use in DS|Manage360. The Total Cost per Hour for each piece of equipment you intend to use in your estimates and job costing is required for entry into DS|Manage360.

Entering The Budget Into Manage360 #

Now that you have gathered all this data, the next step is to enter it all into Manage360. The budget, along with labor and equipment pricing, are entered into Manage360 instead of importing from a spreadsheet like plants and materials. Because these lists are smaller than the other lists, they do not take very long to enter. If you’ve reviewed all your data and you are satisfied that what you have is good to be used on your site, then let’s get started!

First, navigate to Settings > Divisons. Once you are here, select the Division you would like to enter a budget for. On a brand new site, you will only have one “default” Division. You can Rename this Division and set it up to your liking, or you can create a brand new division if you would like to keep two separate budgets. A typical setup will have one Design/Build/Construction Division, and a separate Maintenance Division. Some companies may have separate Divisions just for Snow Removal, Irrigation, or Lighting, if those size of those divisions is significant enough to warrant its own budget & overhead setup.

Open the division that you wish to enter the budget for and scroll down to the section titled “overhead recovery model”. Select the desired OH recovery system. Right below this section will be an area called “division budget” (unless you are using the None OH recovery model). Enter your values for Revenue, Material, Plant, Labor, Equipment, Subcontractor, and Overhead Costs. The labor value should be the sum total of your direct (field) labor and labor burden values.

If you are using the None OH recovery model, no budget is required and you simply define your markups in this section. If using any other OH model, confirm that your overhead markups fall within your desired ranges and tweak them if necessary.

Below the OH markups section, enter your desired profit margin(s). This will be your default profitability base from which estimates are built, and going forward you will be able to tweak the profitability of individual estimates. These default profit margins are simply a starting point.

DEFAULT LABOR BURDEN & WARRANTY MARKUP #

To calculate your labor burden markup, divide the labor burden total from the budget by the total field labor cost. This will give you a percentage which you may enter at the top of the budget under the Division name & description.

The warranty markup is a small markup applied to your plants and materials. To calculate your warranty markup, divide your projected warranty costs for the year by the total projected cost of goods cold for plants and materials. Alternatively, use a small markup such as 5%, effectively making this a small “fudge factor” for warranty on plants & materials.

Make sure that you are not accounting for any costs elsewhere in your budget – for example, if you have warranty costs entered as an overhead cost, then you are already recovering your warranty through your overhead markups.

Both the labor burden and warranty markups are “default” markups, meaning that they will not automatically be applied to your existing labor rates or plants/materials, and they will not overwrite existing markups for these items. The default markup is fetched from the division budget when you create a new labor rate or plant/material. As such, make sure you have the correct markups applied to your items in the costbook.