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Costing full time resources

    Question

  • Greetings everyone!

    I am playing around with costing right now and from that I can see (and this is poorly explained in the documentation), a resources can have a accrual of 'Start', 'Pro Rated' and 'End'. I'm not exactly sure what 'Start' is, but I think 'End' means the resources gets paid in one lump sum at the end. So I am guessing that 'Start' means the resources is getting in one lump sum at the beginning. Prorated means that the resources gets paid for each hour of work they do. Here is my problem. I have resources that will be working FULL TIME on the project. So I want them to start getting paid when their very first tasks starts and I want them to keep on getting paid their daily wage for the duration of the project. How would one go about configuring such a resource?

    cheers, Abbey

    Tuesday, March 01, 2011 10:11 PM

Answers

  • Your interpretation is close or getting there, but not quite exact.

    Project management is all about the tasks and about drawing a boundary around the project to separate it from the rest of the business. The project costs money because the tasks cost money and the reason that the tasks cost money is because the resources cost money (and also because the task might have fixed costs independent of the resources, but let's leave that out of the discussion for the moment).

    The resources only contribute to the cost of the tasks if they are assigned to the tasks. So if Bob does one task and costs $1000 while he is doing it then Bob's cost to the project is $1000. Whatever else he is doing for someone else, or for some other project, or even if he is doing something associated with this project but it is not identified as a task, then it is not a cost to this project. Bob might cost the business $100K/year just to have him available, ie in full time employment, but he only costs $1000 for the project. I don't think that the project manager or the client would like to think that Bob is costing the project money even though he is not making an identifiable contribution to it by performing work on identifiable tasks.

    Accrual is how you might choose to arrange the timing of the cost for the purpose of planning the project. It is more prudent and more conservative to accrue a cost of a resource at the start of the task, rather than pro-rata or at the end of the assignment. That is, you would simply model the cost as occurring earlier rather than later. This has very little to do with when (or even how much) you pay for the resource or when (or even how much) the resource gets paid. So if you planned on incurring a cost early, but knew that you could fend off the payments till later, this would be wiser and more careful planning and budgeting.

    All of that said, it is possible to set up a task and an assignment which is what Bob does as a "real" task, and set up another task which runs the entire duration of the project, call it "Everything Else That Bob Does" and assign Bob to it. This would immediately give rise to some over-allocation where the two tasks occur concurrently. This could be fixed by having two tasks called Bob1 and Bob2, etc.

     

     

    Wednesday, March 02, 2011 9:41 AM

All replies

  • Hi Abbey,
     
    Welcome to this Microsoft Project forum :)
     
    It is not Project’s job to see that the resources get paid.  Project allows a task to be costed so that the total cost of the project can be budgeted for.  Project is not a wages or accounting program.  The resources cost you should apply is the cost to the project of using that resource, and includes pay, training, holiday pay, insurance, etc...
     
    FAQs, companion products and other useful Project information can be seen at this web address:  http://project.mvps.org/faqs.htm
     
    Hope this helps - please let us know how you get on :)
     
    Mike Glen
    MS Project MVP
    See http://tinyurl.com/2xbhc for my free Project Tutorials
    Tuesday, March 01, 2011 11:04 PM
  • Hello Abbey,

    When a Resource is Prorated : In that case the Cost of resource is distributed based on % Complete Reported by him on a task.

    When a Resource is Start Type : All the estimated work cost is given right at Start.

    When a Resource is End Type : No matter what is % Complete reported, cost is given only when a resource have 0hrs of Remaining hrs.

    To see the difference follow steps :

    1.       Create 3 tasks name them as : Prorated, Start, End. All starting on same Date and no linkages define.

    2.       Give them 2 days duration each.

    3.       Create 3 Resources Pro (Prorated type), Sta (Start type), En (End Type).

    4.       Assign them to each tasks as named.

    5.       Now all the tasks have same Duration, single Resource, same Work.

    6.       Now mark all 3 as 50% done.

    7.       Right click on the Top Rectangle and select Cost Table and focus on “Actual” & “Remaining” Columns.

    8.       There you will see the difference for Prorated Actual & Remaining are based on work reported;

    9.       For Start Actual will have entire estimated Cost and Remaining will be 0.

    10.   For End task Actual will be 0 as long as resource have any remaining hours left, and Remaining will have entire estimated cost.

    Hope this help and now you can apply different permutations to understand it better.

     


    Sapna S
    Wednesday, March 02, 2011 9:32 AM
  • Your interpretation is close or getting there, but not quite exact.

    Project management is all about the tasks and about drawing a boundary around the project to separate it from the rest of the business. The project costs money because the tasks cost money and the reason that the tasks cost money is because the resources cost money (and also because the task might have fixed costs independent of the resources, but let's leave that out of the discussion for the moment).

    The resources only contribute to the cost of the tasks if they are assigned to the tasks. So if Bob does one task and costs $1000 while he is doing it then Bob's cost to the project is $1000. Whatever else he is doing for someone else, or for some other project, or even if he is doing something associated with this project but it is not identified as a task, then it is not a cost to this project. Bob might cost the business $100K/year just to have him available, ie in full time employment, but he only costs $1000 for the project. I don't think that the project manager or the client would like to think that Bob is costing the project money even though he is not making an identifiable contribution to it by performing work on identifiable tasks.

    Accrual is how you might choose to arrange the timing of the cost for the purpose of planning the project. It is more prudent and more conservative to accrue a cost of a resource at the start of the task, rather than pro-rata or at the end of the assignment. That is, you would simply model the cost as occurring earlier rather than later. This has very little to do with when (or even how much) you pay for the resource or when (or even how much) the resource gets paid. So if you planned on incurring a cost early, but knew that you could fend off the payments till later, this would be wiser and more careful planning and budgeting.

    All of that said, it is possible to set up a task and an assignment which is what Bob does as a "real" task, and set up another task which runs the entire duration of the project, call it "Everything Else That Bob Does" and assign Bob to it. This would immediately give rise to some over-allocation where the two tasks occur concurrently. This could be fixed by having two tasks called Bob1 and Bob2, etc.

     

     

    Wednesday, March 02, 2011 9:41 AM