Budget & Profit Analysis
The Budget & Profit Analysis section provides a comprehensive financial view of each project. It aggregates all costs --- materials, expenses, and subcontractor payments --- and compares them against revenue from linked sales invoices and received payments. The result is a clear, real-time profit calculation that helps you understand whether a project is making or losing money.
Project Financial Overview
The financial overview displays a high-level summary of the project's financial health:
| Metric | Description |
|---|---|
| Total Revenue | Sum of all payments received and linked sales invoice amounts |
| Total Materials Cost | Sum of all material entries in the project |
| Total Expenses | Sum of all expense entries in the project |
| Total Subcontract Costs | Sum of all subcontractor payments (actual payments, not contract amounts) |
| Total Project Cost | Materials + Expenses + Subcontract Costs |
| Gross Profit | Total Revenue - Total Project Cost |
| Profit Margin | Gross Profit / Total Revenue, expressed as a percentage |
This summary updates in real time as you add, edit, or remove cost entries and link revenue sources.
The profit analysis is based on actual recorded data. If costs or revenue are not yet entered, the analysis will reflect only what has been recorded so far. For the most accurate picture, keep all cost and revenue entries up to date.
Cost Breakdown
The cost breakdown shows how the project's total cost is distributed across the three cost categories:
Materials
The total cost of all materials recorded in the project's Materials tab. This includes raw materials, supplies, and consumables with their quantities and unit costs.
Expenses
The total of all entries from the project's Expenses tab. This covers equipment rental, transportation, permits, and any other project-related costs that are not materials or subcontractor payments.
Subcontract Costs
The total of all payments made to subcontractors, as recorded in the project's Subcontracts tab. This uses actual payment amounts, not the total contract values. Unpaid portions of contracts are not counted toward project costs.
The breakdown helps you identify which cost category is consuming the most budget and where there may be opportunities to optimize spending.
Revenue Tracking
Revenue is tracked from two sources:
Linked Sales Invoices
When a sales invoice is linked to the project, its total amount contributes to the project's revenue. This is the primary way Shaari tracks how much a project is earning. Invoices can be linked from the Sales module by selecting the project when creating or editing an invoice.
Payments Received
Payments received against linked invoices are tracked separately. This gives you visibility into not just what has been invoiced, but what has actually been collected.
Monitor the gap between invoiced amounts and received payments closely. A project may appear profitable based on invoiced revenue, but if payments are delayed or uncollected, your actual cash position may be different.
Profit Calculation and Runs
Basic Profit Calculation
The fundamental profit calculation is straightforward:
Gross Profit = Total Revenue - Total Project Cost
Where Total Project Cost = Materials + Expenses + Subcontract Payments.
Profit Runs
A profit run is a snapshot analysis of a project's profitability at a given point in time. Running a profit analysis generates a detailed report that captures:
- All costs broken down by category.
- All revenue sources.
- The resulting profit or loss.
- Profit margin percentage.
Profit runs are useful for periodic reviews --- for example, running an analysis at the end of each month to track how profitability evolves as the project progresses.
Department Rent Allocations
For projects that use shared office space, warehouses, or other departmental resources, Shaari supports department rent allocation. This allows you to assign a portion of your facility costs to specific projects, giving you a more complete picture of the true cost of each job.
Rent allocations are factored into the project's total cost and affect the profit calculation accordingly. This is particularly important for businesses that operate from owned or leased facilities and want to understand the full burden each project places on the organization.
Department rent allocations are optional. If your business does not allocate facility costs to projects, you can skip this feature and the profit analysis will still function based on materials, expenses, and subcontract costs.
Employee Cost Allocation
In addition to direct project costs, you can allocate employee labor costs to projects. This accounts for the time and wages of employees working on a specific project, adding another layer of accuracy to your cost analysis.
Employee cost allocations combine with department rent allocations to capture the full overhead burden of a project, beyond just the direct material, expense, and subcontractor costs.
Project Reports
Project financial data can be exported in two formats for external use:
PDF Reports
Generate a formatted PDF report that includes:
- Project summary (name, customer, dates, status).
- Full cost breakdown by category.
- Revenue and payment summary.
- Profit calculation and margin.
- Subcontractor payment history.
PDF reports are suitable for client presentations, management reviews, and formal documentation.
Excel Reports
Export project data to an Excel spreadsheet for further analysis. The Excel export includes:
- Material entries with quantities and costs.
- Expense entries with categories and dates.
- Subcontractor contracts and payment histories.
- Revenue and profit summaries.
Excel reports are ideal for auditors, accountants, or anyone who needs to manipulate the data in a spreadsheet.
Generate reports regularly throughout a project's lifecycle, not just at the end. This creates a historical record of how costs and profitability evolved over time, which is valuable for estimating future projects.
Profit Run Analysis
A profit run analysis provides a deeper look at project profitability by combining all financial dimensions:
- Direct costs --- Materials, expenses, and subcontractor payments.
- Allocated costs --- Department rent and employee labor allocations.
- Revenue --- Linked invoices and received payments.
- Net profit --- Revenue minus all costs (direct and allocated).
This comprehensive view helps you understand not just whether a project is profitable on paper, but whether it truly generates value when all costs --- including overhead --- are accounted for.
Profit run analysis is only as accurate as the data entered. Ensure all materials, expenses, subcontract payments, rent allocations, and revenue links are recorded before running a final profitability analysis on a completed project.