Improve Project Pricing and Revenue with Polaris SmartBudget

Are you a project manager facing troubles or needing help in preparing project budgeting? Do you want to save time as well as reach maximum accuracy while budgeting projects?

We know that preparing project budgets is one of the most challenging aspects of project management, especially for larger and more complex projects. With budgets tightening, managers need more accurate ways to estimate costs, so they can procure funds for resource allocation and provide clients and stakeholders with confidence that projects will be delivered on time and on budget.

This is where SmartBudget in Polaris PSA comes in. Managers can use SmartBudget to simulate cost, price, margin, and profitability for projects to ensure that the project is set up for profitability and hits revenue goals.

Read on to learn more about the features of SmartBudget that reduce project budgeting challenges and increase the return on investment for projects.

Challenges in Project Profitability

Polaris PSA's SmarBudget is designed to identify and address problems in project budgeting, supporting Professional Services Organizations (PSOs) in achieving maximum profitability.

The budgeting issues PSOs face include:

• Not understanding what billing rates provide maximum profits
• Lack of visibility into real-time current billing rates and problematic areas where the budget is falling short
• Lack of clarity into how to adjust rates so they yield optimal profits

Polaris PSA's SmartBudget provides a solution to all these issues, so it can help project managers who leverage it to achieve optimal results.

Features of Polaris SmartBudget

The features of Polaris PSA's SmartBudget offer optimal benefit to the project managers when budgeting. Below, we outline some of the things SmartBudget can help you achieve to give you a better understanding of this project budgeting automation tool.

Create Profitable Bids

A recent SAP study, Intelligent Enterprise for the Professional Service Industry, notes that 80 percent of project profitability is determined at the bid stage, and more than half of all projects do not deliver to plan. This is mostly because project managers fail to factor in true utilization, 100 percent of costs, and margins to ensure profitability.

However, SmartBudget offers a solution for ensuring profitable bids. The key feature of SmartBudget is its ability to build competitive bids by considering all business costs, utilizing resources efficiently based on historical data, and accounting for both current and future availability. The insights from historical as well as real-time data help managers avoid underquoting during the bidding process. SmartBudget paves the way to making a well-informed decision.

Operate with Optimal Billing Rates

Project managers must understand the billing rates that yield optimal margins while considering all relevant costs. Operating with optimal billing rates is the ideal way to maximize profits. One of the hurdles to deciding optimal billing rates is the failure to calculate all relevant costs, which can include billing rates, project expenses, training and upskilling costs, research expenses, capital expenditure, and other significant material expenses involved in the project.

SmartBudget minimizes the risk of missing relevant costs by automatically consolidating all business-related costs, including project, non-project, direct, and indirect costs, to calculate the most profitable billing rates. The auto-calculated billing rates are estimated considering the entire business of the organization, the cost of resources, the desired margin, and the utilization rates. This automation minimizes administrative overhead and human-induced errors. Since SmartBudget provides visibility into billing rates in real time, project managers can rely on it to figure out the costs that may affect project profitability.

And, since resource requirements will vary from project to project, SmartBudget gives project managers the flexibility to adjust rates to fit each individual project’s profit goals. This leads to maximum revenue generation from the project. Finally, to avoid repeating the same work, project managers can create default rate cards for each role using SmartBudget.

Improve Profits

Project revenue is mainly influenced by utilization rate, billing rate, and margin. Project managers need to employ critical thinking to analyze project "what ifs" and understand how changes to each of these items will impact cost and utilization in the future.

SmartBudget enables project managers to simulate profit and revenue scenarios based on varying utilization, margin, and revenue goals, as well as the average billing rate. Project managers can customize these goals and objectives, and SmartBudget will consider all the metrics and calculate the rates required to reach the best results. As SmartBudget's built-in engine presents project managers with all metrics, managers can drill down to check how successful each scenario would be in growing profits.

Track Revenue in Real Time

SmartBudget provides real-time visibility into all financial metrics involved in projects, such as costs, billing, and cash flow, so project managers receive up-to-date information on the financial health of their projects. Keeping tabs on how project estimates compare to actual cost helps project managers focus on where the project is failing to achieve the desired profit. Focusing on roadblocks paves the way to fixing issues quickly. SmartMatch is accurate, and automatic calculations allow project managers to figure out where they've gone off course easily and instantly adjust billing rates, costs, or margins to fix their trajectory proactively.

Explore the Power of SmartBudget

With SmartBudget, businesses can set revenue targets, taking into account all costs and leveraging historical metrics to make informed pricing decisions. Managers gain complete visibility into true costs and billing rates in real-time, enabling them to make necessary adjustments before problems impact project profitability.

Benefits of Using Polaris SmartBudget

Using SmartBudget can give your organization numerous benefits. It can help you:

Stay Within Your Budget

If something is affecting your budget, project managers can easily root out the cause using SmartBudget. It allows you to track job costs and commitments while improving project delivery, and highlights risks in real-time, so you can address them before they derail your budget.

Keep a Close Watch on Critical

Breaking a project into smaller achievable targets enables project managers to ensure every task is completed. It also helps them keep track of critical tasks that require more attention. Since SmartBudget provides real-time data, project managers are always up to date on how their projects are progressing and can make prompt changes when needed.

Optimize Decision Making

SmartBudget brings together all relevant project financial data from across your organization's and users' systems to provide a single source of truth. Having one source of up-to-date data makes it easy for project managers to identify potential areas of concern and to make the right decision at the right time to overcome those hurdles.

Improve Time Management

As SmartBudget is an automated tool, project managers no longer have to carry out tedious calculations. This allows them to invest their time in other critical project tasks that require their attention.

Set Effective Billing Rates

Being a part of Polaris PSA allows SmartBudget to cut across data silos and collate all relevant financial data from all of your integrated users and office systems and applications. By analyzing the data from these various sources, SmartBudget can easily generate effective billing rates.

Sign up for a demo to learn how using SmartBudget with our Professional Services Automation software, Polaris PSA, can help your business.