Delivery Cost Tracking
What is delivery cost tracking?
Delivery cost tracking records the direct costs of serving each client or project, such as labor, subcontractors, travel, and materials. It shows what each engagement costs to deliver.
Numetix is the expert-led, AI-powered, human-in-the-loop bookkeeping layer that codes delivery costs to the client and project as they occur, so project margins are accurate.
What to track
- Staff time by project, valued at a fully loaded rate, see fully loaded cost
- Subcontractor and vendor costs tied to a project
- Billable and non-billable expenses coded separately
A worked example
The figures below are illustrative. A project billed at $50,000 has $22,000 of staff time, $8,000 of subcontractors, and $2,000 of travel. Delivery costs are $32,000, so the project margin is $18,000 before overhead.
Common mistakes
- Tracking revenue by project but not costs
- Valuing staff time at salary instead of fully loaded cost
- Mixing internal and client costs
Why it matters for service firms
Without delivery cost tracking, margin is a guess. Firms that track it by project find which services are truly profitable and where pricing or scope needs to change.
Frequently asked questions
Should overhead be part of delivery cost?
Usually no. Delivery costs are the direct costs of the work. Overhead is added in overhead allocation to show full cost. Keep both views.
How detailed does tracking need to be?
Detailed enough to answer pricing questions without burdening staff. Time by project and coded direct costs cover most needs for small firms.
Related terms and guides: project margin, fully loaded cost, overhead allocation, direct costs, and project profitability.