Reserve for expenses that are virtually impossible to predict
Posted: Sun Jan 19, 2025 10:10 am
Overhead costs are expenses that cannot be included in any project, but they constantly arise during its implementation. They must be distributed between projects. Several options for budgeting overhead costs are used:
Write-off of overhead costs to the overall financial result, taking into account separate budgeting of overhead costs.
Distribution of overhead costs according to coefficients that take into account the importance (priority) of projects.
Determining the rate of reimbursement of key workers taking into account overhead costs. The rate allows for the distribution of overhead costs across projects in proportion to the time spent on them. The rate may differ for different groups of workers and may also depend on the timekeeping system.
Use of internal subcontracting. For why choose our service this purpose, transfer prices are established between the company's divisions, which can be determined by the market value for the same work or by labor costs, taking into account the coefficient for covering overhead costs.
Reserve for expenses that are virtually impossible to predict
The reserve is calculated for each possible risk and allows for small deviations in project expenses. It is strongly recommended not to calculate the reserve as a fixed percentage of revenue or cost. The reserve must be justified by objective factors influencing the project and the actual state of affairs in the project. The size of the reserve for the project must be determined based on assessments of the actual risks that may arise during the project.
Download a free selection of tools for calculating KPIs and increasing marketing metrics
Alexander Kuleshov
Alexander Kuleshov
General Director of Sales Generator LLC
Read more posts on my personal blog:
Over the past 7 years, we have conducted over 23,000 comprehensive website audits and I have learned that all of us as leaders need clear and working algorithms for our marketing and sales.
Today we will share with you 6 of the most valuable documents that we have developed for our clients.
Download for free and implement today:
Step-by-step guide to creating marketing KPIs
Template for calculating KPIs for a marketer
9 Examples of Universal Selling Commercial Proposals
Upgrade your CPs to close more deals
How to make KPI for the sales department so that profits grow by 20% or more?
Step-by-step template for calculating KPIs for OP managers
Checklist of 12 main indicators for website promotion
Find out what metrics are needed to properly optimize your website
40 Services for Working with Blog Content
We have collected the best services for working with content
How to define your target audience without mistakes?
A proven guide to defining a company's tar
Write-off of overhead costs to the overall financial result, taking into account separate budgeting of overhead costs.
Distribution of overhead costs according to coefficients that take into account the importance (priority) of projects.
Determining the rate of reimbursement of key workers taking into account overhead costs. The rate allows for the distribution of overhead costs across projects in proportion to the time spent on them. The rate may differ for different groups of workers and may also depend on the timekeeping system.
Use of internal subcontracting. For why choose our service this purpose, transfer prices are established between the company's divisions, which can be determined by the market value for the same work or by labor costs, taking into account the coefficient for covering overhead costs.
Reserve for expenses that are virtually impossible to predict
The reserve is calculated for each possible risk and allows for small deviations in project expenses. It is strongly recommended not to calculate the reserve as a fixed percentage of revenue or cost. The reserve must be justified by objective factors influencing the project and the actual state of affairs in the project. The size of the reserve for the project must be determined based on assessments of the actual risks that may arise during the project.
Download a free selection of tools for calculating KPIs and increasing marketing metrics
Alexander Kuleshov
Alexander Kuleshov
General Director of Sales Generator LLC
Read more posts on my personal blog:
Over the past 7 years, we have conducted over 23,000 comprehensive website audits and I have learned that all of us as leaders need clear and working algorithms for our marketing and sales.
Today we will share with you 6 of the most valuable documents that we have developed for our clients.
Download for free and implement today:
Step-by-step guide to creating marketing KPIs
Template for calculating KPIs for a marketer
9 Examples of Universal Selling Commercial Proposals
Upgrade your CPs to close more deals
How to make KPI for the sales department so that profits grow by 20% or more?
Step-by-step template for calculating KPIs for OP managers
Checklist of 12 main indicators for website promotion
Find out what metrics are needed to properly optimize your website
40 Services for Working with Blog Content
We have collected the best services for working with content
How to define your target audience without mistakes?
A proven guide to defining a company's tar