The SWIFEE Team has added a profitability component to SWIFEE spreadsheets that allows the user to test varying fee amounts and profit margins with project and team specificity. We have also expanded input fields to allow contingency reserves and contract-related costs to be set aside upfront.
SWIFEE profitability calculations depend on the accuracy of the following metrics:
- Your Personnel “benefits factor,” or Direct Job Labor Burden. This factor measures all labor-related mandatory and customary employment benefits, including but not limited to such as taxes, retirement, insurance, bonuses, etc. This factor is calculated by the formula “Total Benefits /Total Wages” for hours worked.
- Your Breakeven Multiplier. This multiplier assumes that other direct and reimbursable expense is reimbursed dollar for dollar. It does not include profit. To determine this multiplier, calculate “Overhead Rate+1.00.” The Overhead Rate itself is determined by “Overhead/Direct Labor”. Overhead refers to all costs not chargeable to a specific project, such as rent, utilities, insurance, etc.
The Decisive Net Multiplier
The magnitude of profit will of course be determined by the Net, or Direct Labor Yield Multiplier. Savvy users will know that this multiplier converts direct labor dollars to billable dollars. It is calculated by “Net Revenue/Direct Labor” and like the Breakeven Multiplier, it assumes that all project related costs other than labor are reimbursed dollar for dollar. A net multiplier of 3.17 would mean that you need $3.17 of net revenue for each $1.00 of direct labor spent on a project to cover project labor, overhead and profit.
SWIFEE Version 1.0.2 links direct labor hourly rates of your specific team with the net multiplier. As a result, SWIFEE allows you to manipulate the net multiplier and instantly see its impact on direct labor, itself calculated to reflect full eight-hour workdays. The lower the net multiplier value, the greater the hours allocated to the project, but the less profit calculated. If this multiplier is equal to or less than your Breakeven Multiplier, you will achieve no profit or sustain a loss on the project, respectively.
Download Anew Today
Download fresh versions of SWIFEE PRO and SWIFEE LITE – the profit series – to gain even greater value today. If you have already purchased either version of SWIFEE, simply download a new trial version to overwrite the earlier version that you currently have; your current registration key will unlock SWIFEE for unlimited use without a problem. If you tested SWIFEE prior to the date of this posting, you would do well to try it again today with a new download.