# Cost Rates Management

Consulting firms' most significant expenses should be accounted properly.
Take a look at the flexibility of cost rates settings in Metric.ai

## Expenses approach setting

There are three types of expenses on the employees' approach in Metric.ai:
Organizations' average rate
Average rate per role
Rate for each employee

Metric.ai interface, finances settings

## Organizations' average rate

The average cost per employee hour, which should include all of the organization's costs.

This approach offers a fast, easy way to estimate expenses when this data is available from the finance team, or it can be quickly determined. The average rate for the company is also useful when the rate for each employee should be specified, but you don't have an exact cost for some team members.

This method produces less accurate expense estimates, as it doesn't take into account project team structure. The average rate for the organization is a good starter option, but when overtime in involved, we suggest using exact employees rates.

## Average rate per role

The average rate per role is the specified rate for each role in the organization. If the role doesn't have a rate or the employee doesn't have a role, the average rate of the organization will be used instead.
Metric.ai interface, role rates management

More accurate project expense estimation as it takes into account project structure.

Depending on the organization, employee rates for the same role could deviate, leading to less accurate estimates. The employee's seniority level is not taken into account unless it is reflected in the roles structure.

## Rate for each employee

With this option, the rate can be specified for each employee individually. If an employee doesn't a specified cost, average rate per role or organization will be used instead.

Using Metric.ai, it is possible to specify hourly, monthly, and annual rates per employee.
Metric.ai interface, employee rates management

The exact expanse rate for each employee gives the best accuracy regarding project, department, and office costs.

This method requires more time to input manually, unless you have a CSV or spreadsheet from which to import the data.

## Data import

If you don't want to input your cost rates for each employee manually, you can import the data using the following:
• A .csv file (can be exported from Microsoft Excel or any other spreadsheet editor)
• Import from the payroll system through the API

If you are interested in Metric.ai, we want to be sure that it will be beneficial to you. That is why we provide a white-glove initial setup to double check that all data import works appropriately.

## Employee bonus management

When employees receive bonuses, there are multiple ways to handle the data in Metric.ai so cost rates will be accounted properly across projects, departments, roles, clients, and offices.

Input expenses for the employee in the finance management section.
Metric.ai interface, finances management, addition of a new expense
Or add a historical change in the cost rate of the employee for 1 month.

## Historical cost rate support

It is a fact that employees' salaries change over time. However, most systems on the market don't support historical cost rates change.

Imagine an employee who has a higher salary after 6 months of work. The project on which he is working has a duration of 1 year. If we increase the employee's cost rate without saving the old value for the previous 6 months on the project, the profit and loss analysis will be inaccurate.

### Historical cost rate calculation example

The employee monthly rate for the first half of the year is $5,000. The employee monthly rate for the second half of the year is$6,000.

Inaccurate expense calculation example (most systems):
$$12\; ×\; \6,000\; =\; \72,000$$
Accurate expense calculation example (Metric.ai):
$$6\; ×\; \5,000\; +\; 6\; ×\; \6,000\; =\; \66,000$$
A correct calculation supports the historical data change and avoids an extra \$6,000 loss:
$$\72,000\; -\; \66,000\; =\; \6,000$$
Metric.ai support historical cost rate changes, so all expense metrics will be entirely accurate across the organization.