Profitability in Factorial is calculated by comparing what you bill clients (revenue) with what you spend to deliver the project (costs).Factorial gives you a complete view by combining:
- Bill rates
- Total costs (employee expenses or purchase invoices)
Bill rates
Bill Rates let you define how much to bill per hour of work in your projects. This ensures consistent profit margins and accurate profitability tracking.Factorial offers two ways to manage bill rates:
- Default Bill Rates
- Custom Bill Rates (Per Project)
How to Set Up Bill Rates in Projects
Default view
Access the Bill Rates section
- On your sidebar, go to Projects section
- Click on the Jobs and rates tab
- Hit the ➕ Add jobs button to start configuring.
Select roles or users
- Choose from company roles (e.g. Product Manager, Software Engineer, etc.).
- Filter by seniority (Junior, Mid, Senior, Director).
- You can also click Select users to set up billing rates for individuals.
This is useful when some employees have special billing conditions compared to their role’s default.3. Configure profitabilityAt the top, choose how you want to calculate bill rates:
- Same profitability → apply the same profit margin (%) across all selected roles.
- Different bill rates and profitability → define unique values per role.
- AI recommendation (coming soon) → get suggested rates based on historical data.
Enter the minimum profit margin %. Factorial will automatically calculate the billing rate based on employee cost.4. Adjust costs and ratesFor each role or user, you’ll see:
- Max cost rate (€/hr) → maximum hourly cost for the person/role. (comes from contract at the moment)
- Bill rate (€/hr) → hourly billing rate (editable).
- Min. profit margin (%) → guaranteed minimum profit.
You can manually edit any of these fields to match your company’s pricing strategy.
Click Save to confirm changes.
The billing rates will automatically apply to projects where those people/roles are assigned.
If you need a custom rate for a specific employee:
- Open their role > select the person > Edit user rates.
- Add a custom rate with an effective date.
- Factorial will keep historical records and apply the new rate only to future projects.
Monitor margins and profitability
- In the Jobs and rates table, review all roles with their costs, bill rates, and margins.
- Any updates will immediately impact project profitability calculations.
- You can always revisit this setup to refine your billing strategy.
How to Set Up Bill Rates in Projects - Per project
Sometimes, projects require different rates than the company defaults (e.g., specific client agreements, special discounts, premium billing).At Project Level
- Open the project.
- Go to the People and Rates tab.
- Adjust the Bill rate directly for each employee in this project.
- Changes apply only within this project and won’t affect other projects.
Total Costs
We are introducing invoice allocation as a core part of project cost management.
This feature allows you to:
- Assign purchase invoices directly to projects, just like employee expenses — consolidating all financial data in one place.
- Gain a complete view of project costs, combining expenses and invoices for more accurate budget tracking and profitability analysis.
How does it work?
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Add Employee Expenses
Link employee expenses to specific projects to capture real labor-related costs.
-
Upload Purchase Invoices
Attach financial documents (e.g. supplier invoices, purchase orders) directly to a project.
Both expenses and invoices are automatically included in the total project cost, giving you a reliable calculation of profitability.
Project Overview
The Project Overview gives you a complete snapshot of your project’s health in real time. From here, you can track progress, financials, and profitability without jumping between tabs.
What you’ll find in the Overview
1. Project Status
- Tracked hours → Total hours logged by the team so far.
- Task progress → Visual indicator of tasks done, overdue, and pending.
2. Financial Details
This section consolidates revenue, costs, and profit in one place.
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Revenue-to-date → How much income your project has generated so far.
- Calculated as:
- Hours × Bill rate (billable hours)
- + Billable expenses (employee expenses and purchase invoices marked as billable)
- Calculated as:
-
Cost-to-date → How much your project has cost up until now.
- Calculated as:
- Hours × Cost rate (labor costs)
- + Validated expenses (employee + purchase invoices)
- + Fixed costs
- Calculated as:
-
Current profit → The net profit of your project in real time.
- Formula: (Revenue-to-date) – (Cost-to-date)
- Also shown as a profit margin % for quick analysis.
3. Progress Breakdown
Drill down into how costs are evolving week by week:
- Fixed costs → Recurring project costs (e.g., software licenses).
- Spending → Validated employee expenses and purchase invoices.
- Labor costs → Based on tracked hours × employee cost rates.
The graph shows the evolution of costs over time so you can spot trends and detect overruns early.
Why it matters
The Overview makes it easy to answer the key questions every project manager asks:
- Are we on track with time and tasks?
- Are we within budget?
- How profitable is this project right now?
With a single view, you get the big picture of project performance — helping you make smarter, faster decisions.