A credible bottom-up revenue forecast is the end goal. Getting there takes a few steps. This document tells you the least painful way to get there.

Set global average rate as the baseline

Use a recent average – ask your CFO or controller if they know what that’s been. This is the charge-out rate that your clients pay you per hour.

Decide: do you want to have a big up-front effort?

If it’s important for you to get rates right across your ongoing project portfolio, set the rate cards for each of the ongoing projects.

Easier start: set the rates for new projects as they come, you will eventually get it right

Make it a must-do for people creating new projects in the Horizon to set the rates as you’re creating the team setup. This is the moment in time when it’s easiest. You probably have the proposal at hand, and prices haven’t changed yet.

Communicate: why getting rates right matters

Explain to your sales team and project managers how this makes reporting and steering the business easier. Show them which capacity / revenue forecasts are used in recruitment / investment decisions and what material you share with the board of directors.

People may not realise how much effort it takes to do these reports and forecasts manually whenever they’re needed.

Project owner = responsible for the project information

Operating has a single owner for every project. That’s the name who should know best. Often, that’s the person who has most interaction with the buyer / key stakeholder in the client organisation. They probably send the invoices, and it matters a great deal to them that both the plans and the invoices are correct.

Create as many rate cards as necessary

You may follow a very strict pricing strategy or negotiate them for each case separately. If you’re more liberal about rates, then you will end up creating lots of client- or project-specific rate cards. Don’t worry.

Using an existing rate card as the basis speeds things up nicely.

Good luck! Let’s make lots of money.