Financial Operations

Klority's Financial Operations module bridges the gap between engineering execution and business profitability. It tracks every labor cost, forecasts project margins in real time, and produces audit-ready reports — all without leaving your project workspace.

The Financials Dashboard

Navigate to any project and select the Financials tab to see a live summary of the project's financial health. The dashboard is divided into four key metrics:

Total Labor Cost

The sum of all approved time logs multiplied by each team member's cost rate at the time of logging. Represents your internal expenditure.

Total Revenue

For Hourly projects: approved hours × billing rate. For Monthly models: the sum of all generated invoices. This is what you bill your client.

Gross Margin

Calculated as (Revenue − Cost) / Revenue × 100. The single most important indicator of project profitability.

Fixed Expenses

Non-labor costs logged directly to the project (e.g. server costs, software licenses, travel). A default markup percentage can be configured at the workspace level.

Billing Models

Every project in Klority uses one of three billing models. You set this in Project Settings → General.

1. Hourly (Time & Material)

Your client pays for every approved hour worked. Each team member has a Cost Rate/hr (internal) and a Billing Rate/hr (client-facing). When you generate an invoice, the system compiles all unbilled, approved time logs and calculates: Hours × Billing Rate.

  • Best for: Ongoing support contracts, open-scope feature development.
  • Requires: Team members to log time via the Time Tracking panel in each task.
  • Approval gate: Only Approved time logs count towards invoices and cost reporting.

2. Monthly Fixed Fee

A single flat amount is invoiced per billing period, regardless of hours worked. Configure the monthly retainer amount in Project Settings → General → Monthly Fixed Fee.

  • Best for: Fixed-scope retainers, managed service agreements.
  • Internal cost tracking: Team members still log time internally so you can track your true gross margin against the flat fee.
ℹ️

Cost Visibility Still Works

Even on a Fixed Fee project, Klority tracks internal labor costs from time logs. This lets you see whether your flat fee is actually profitable month over month.

3. Monthly Per Resource

Each assigned, billable team member has a Cost Rate/mo and Billing Rate/mo. The invoice is calculated dynamically: Quantity × Billing Rate/mo per resource.

  • Best for: Staff augmentation, dedicated development teams.
  • Pro-rating: When a resource joins mid-month, Klority automatically calculates a proportional quantity (e.g., 0.5 for joining on the 15th of a 30-day month).
  • Quantity override: You can manually adjust the quantity multiplier in the invoice wizard (e.g., 0.25 for a quarter-time resource).

The PAC Engine (Projected at Completion)

The Projected at Completion (PAC) engine is Klority's financial early-warning system. It forecasts your total project cost and revenue based on work remaining.

PAC Formula

PAC Cost = Actual Cost to Date + (Remaining Estimated Minutes / 60 × Avg. Cost Rate)

Where "Remaining Estimated Minutes" is the sum of estimated minutes on all open (non-Done) tasks.

The PAC is updated automatically whenever tasks are completed or estimates are changed. If your PAC Cost exceeds your Cost Budget, Klority highlights it in red — giving you weeks to course-correct before the project ends.

Historical Rate Snapshots

When a time log is saved, Klority takes a snapshot of the team member's active cost and billing rates at that exact moment. This snapshot is stored in project_rate_history.

🔔

Why This Matters

If a developer's cost rate changes from $50/hr to $60/hr in February, all time logged in January remains calculated at $50/hr. Your Q1 profit reports will never be retroactively distorted by a Q2 rate change. Historical data is always accurate.

You can view the full rate history for any team member by clicking the Rate History (clock icon) button in Project Settings → Team.

Billable Settings Per Member

In Project Settings → Team, every member has a Billable? toggle:

  • ON (Billable): This member's time and/or monthly rate will be included in invoice calculations.
  • OFF (Non-Billable): This member's work contributes to internal cost tracking only. They will never appear on client invoices.

This is useful for roles like internal QA engineers or project managers who are overhead costs, not billed hours.

Fixed Expenses

Log non-labor costs directly to a project from the Financials tab. These expenses are included in the Total Cost calculation and can be passed through to the client invoice with a markup.

  • Configure a Default Markup % in Project Settings (e.g., 20%) to automatically inflate expenses for client billing.
  • Expenses can be marked as billable or non-billable, controlling whether they appear on invoices.

Budget Thresholds

Set financial guardrails in Project Settings → General:

  • Internal Cost Budget: The maximum you expect to spend internally. A warning appears when PAC Cost approaches this limit.
  • Client Revenue Budget: The maximum contracted value with the client. Useful for fixed-price deals.
Previous ← CRM & Sales Next Up Invoices & Billing →