Overview

Capping T&M Projects - Have you ever had a Project on which you wanted to set a Budget threshold, but wanted to still operate using fixed Rates for your workers?  Using either the Fixed Bid or Retainer Financial Model can allow you to set a fixed budget, but use an effective rate then become variable as ongoing work is added.  By contrast, the Time & Material Financial Model lets you set fixed Rates, but then your budget continues to climb.  Wouldn't it be great to have the best of both worlds?   Good news, we've heard the feedback, and we're doing just that, by adding the new Not to Exceed function to the Time and Materials Financial Model!

What is a "Not to Exceed" cap?

In a nutshell, the Do Not Exceed function (or NTE for short) is a checkbox that will appear when selecting the T&M (Time and Materials) Financial Model on a Project Offering.  You can find this checkbox in the Financial Settings for a Project; selecting this box will allow you to set a cap – after reaching that cap, all further Actuals will be treated as zero-bill hours instead of billable Actuals. 

This allows you to set a fixed budget, without making your Bill Rates variable!

How do I set an NTE on an Offering?

We've endeavored to make the NTE function as unobtrusive and easy to use as possible.  It works by Offering (so you can choose to cap or not cap each Offering as needed); just do the following:

1. Visit the Financial Settings Tab for the Project you want to cap.
2. Make sure you've selected Time & Materials as the Fiancial Model.
3. Check the box "Not To Exceed".
4. Enter the desired cap for the Offering.
5. Click Save.

How an NTE Cap Works

The most important thing to remember is that the NTE will only affect the Service Revenue in an Offering – not Costs.  Costs will continue to be calculated as normal and you'll keep the Rates that are applied by your Rate Card, with Revenue being calculated normally right up until the date you reach the cap you set with the NTE.   

Once you reach that cap, you'll be able to continue to allocate additional hours, but they will instead calculated with a Bill Rate of $0.00.  You'll be able to see both the total capped Revenue, but you'll also be able to see the impact of that cap and any hours that were completed past the budget.  We display this on the Project Details Overview page in three different ways:

1. In the Revenue Column, both the total and any individual Roles exceeding the NTE cap will have a strikethrough and the adjusted total below it.
2. We've added the new Write-Off Column
3. In the Shaper any total Revenue exceeding the NTE cap will have also have a 
4. strikethrough and the adjusted total below it.

Since Costs do not change based on any Cap that you reach, they will continue to increase – by retaining visibility on what total financial impact is of the NTE cap you've set, you can see the impact of the cap in order to pivot and make the necessary adjustments, and to help forecast future projects.