Price the work, not the wish.

Cost rate and billing rate are different

Your cost rate represents what providing an hour of work costs the business. Your billing rate is what you charge a client for that hour. If you enter your selling rate as a cost and then compare it with revenue, the displayed profit will not describe your actual project economics.

For an employee, a loaded cost rate may include pay, employer contributions, benefits, and a reasonable allocation of relevant employment costs. For an independent professional, it may represent a target compensation cost plus explicitly chosen operating costs. There is no universal rate: use your own records and obtain accounting guidance when necessary.

Estimate effort, not elapsed time

A task that takes three calendar days to get approved might require only two hours of active work. Enter active working hours in the labor estimate and use dates to represent the scheduling window. Waiting for feedback can delay delivery without creating the same amount of labor.

Include the work surrounding production: preparation, meetings, research, checking, revisions, and handover. If these activities consume time, they belong somewhere in the estimate. Avoid assuming that every hour available in a week can be assigned to delivery; administration and other commitments still need capacity.

• Ask the person doing the task for an effort estimate.
• Check comparable work in your own time records.
• Identify unfamiliar work that needs a wider allowance.
• State how many review rounds the estimate includes.

Use role-specific rates when they matter

A blended rate applies one average cost across a team. It is convenient for early estimates and simple work packages. Its disadvantage is that a changing mix of senior, junior, and specialist effort can materially alter the real cost without changing the apparent estimate.

Role-specific rates provide more detail. PlanForge supports a separate hourly rate for every task, so you can split a mixed-role activity into distinct tasks. This improves visibility but requires more maintenance. Choose the level of detail that helps you make decisions rather than precision for its own sake.

These hypothetical inputs produce £720 of estimated labor. They are not recommended rates or claims about what any profession charges.

Decide where overhead belongs

You can incorporate an overhead allocation in your cost rate, or add a separate project expense. Either method can be useful, but do not apply both to the same cost. A written note explaining the method is more valuable than an unexplained number with several decimal places.

Subcontractor work also needs a consistent home. If the subcontractor quotes a fixed fee, recording it as an expense may be clearer than inventing hours. If you genuinely buy hours at an agreed rate, a labor task can make sense. Never enter the same subcontractor invoice in both categories.

Handle uncertainty explicitly

For difficult tasks, consider an optimistic, expected, and difficult-case estimate before choosing the value entered in the tool. PlanForge stores one working estimate per task; it does not calculate probabilistic forecasts. Export alternative summaries if you want to compare scenarios without overwriting your baseline.

Review the estimate when new information arrives. If actual work reveals that a task is larger than expected, update the forecast rather than treating the original number as a promise that reality must obey. Keep actual time in your separate time-recording system; the planner is not a timesheet application.

Check the number before quoting

Confirm that every task has a deliberate rate, including tasks entered at zero. Check that review effort is included and that the resulting schedule fits real availability. Then compare labor with materials, expenses, and the proposed revenue. An accurate labor subtotal is the foundation of a quote, not the complete quote itself.