Overview
Project budgets in Factor are built on the Budget tab of a project. Budgets are composed of phases in the fee breakdown, each with a billing type, status, and budget amount. This article covers how to create phases, allocate budget amounts, and manage subconsultant and expense budgets.
Creating Phases
To begin building a budget, go to the Budget tab and click + Add Phase in the fee breakdown area.
Phase Setup Options
When you create or modify a phase, you'll see several setup options:
Name — A descriptive name for the phase.
Service Type — Unique to your firm and modifiable in Settings. The service type defines the type of income generated from the phase (e.g., selecting "Architectural Design" classifies revenue from this phase as architectural revenue). If your account is linked to QuickBooks Online, service types are linked to products or services in QuickBooks.
Billing Type — Determines how the phase is billed:
Non-Billable — Used for phases that will never be billed. Team members can still log time, but it won't be invoiced. Use this for non-billable direct work on client projects or indirect work like admin time.
Hourly — You review each hourly time entry logged to this phase and select which time to include on an invoice. You can include an hourly time report with the invoice showing who worked and when. You can also enable a Not-to-Exceed switch to prevent billing more than the budgeted amount.
Fixed Fee — You invoice in lump sum amounts. Two subtypes exist:
Milestone Complete — Invoice the budgeted amount when the work is ready to bill.
Percent Complete — Invoice based on a percentage. You can have Factor calculate the amount from the percentage, or enter a specific amount and let Factor calculate the percent complete.
Parent — Optionally assign the phase under a parent phase. The parent-child relationship affects budgeting and invoicing: you can allocate dollars and hours at the parent level, child level, or both. Time entries are always logged at the child level and roll up to the parent. You choose whether to invoice at the parent or child level, but it is recommended to bill at the child level when child phases are present, even if you only want to display parent level information on the invoice.
All phases in a parent-child hierarchy must share the same billing type. You cannot mix hourly and fixed fee phases under the same parent.
Category — Organize phases using categories (e.g., to control which phases appear on an invoice). Category names are created the first time you type one in while setting up a phase. To view or remove obsolete or misspelled category names, go to SETTINGS > Lists. Names can't be edited directly - to correct one, remove it and add the corrected version.
Status — Controls time entry and invoicing availability:
Not Started — The phase will not appear in the time entry dropdown.
In Progress — Team members can log time and invoicing is allowed.
Completed — Time entry is no longer allowed, but invoicing is still possible for remaining unbilled work.
Closed — No more time entry and invoicing is finalized.
To complete a parent phase, all child phases must be Completed or Closed. To close a parent phase, all child phases must be Closed.
For Expense/Subconsultant — A switch that marks the phase as an expense phase that can be tied to an expense budget.
Additional Services — A switch that marks the phase as added after the original contract. This visually differentiates the phase in the fee breakdown and can be used for reporting.
Previous System Migration (Has this work been tracked and/or billed in another system?) — A switch used only when migrating projects from another system. It allows entering previously captured hours, dollars, and invoice amounts so you don't over-bill or surpass a not-to-exceed budget. This can only be adjusted before you log time or issue an invoice.
Allocating Budget Amounts
Budget amounts are entered in the fee breakdown by clicking the header of the Budget section, which opens the phase budget view. From here you can: - Budget by phase or by role. - Specify how parent and child phases are linked from a budget perspective. - The dollars you allocate define the total project budget and affect the information shown to people entering time — they will see a percentage of budget spent as hours are logged. You are not required to enter a budget amount, but if you don't, people entering time won't see a percentage of budget spent.
Copying Phases
You can use the copy icon on the fee breakdown to duplicate a phase. This copies all child phases, budget amounts, and settings (status, service type, billing type). You can then make adjustments as needed. This is useful for quickly building out your fee breakdown.
Editing and Deleting Phases
To modify a phase, click the pencil icon on the fee breakdown. To delete a phase, use the trashcan icon — but deletion is not possible if time has been logged or invoices have been issued for that phase. To delete a phase with history, you would need to void any invoices and move or delete time entries first (voided invoices must also be permanently deleted by Factor Support). You can also change the status of a phase directly from the dropdown on each line in the fee breakdown. The billing type can also be adjusted later, but not if invoices have already been issued that include the phase.
Subconsultant and Expense Budgets
In addition to service fee phases, you can create expense budgets on the Budget tab for subconsultants and reimbursable expenses.
Creating an Expense Budget
When adding an expense budget, you can:
Choose whether the amount is included in your service fee amount (phase budget amount)— If included, the expense budget amount becomes part of your overall fee total. If not included, it's tracked separately.
Specify expense type/types — Select from expense types defined in your firm SETTINGS. Expenses logged with those types are tracked against this budget. Standard type expenses can be combined into a single expense budget. Separate subconsultant type expenses cannot be combined into a single expense budget.
Specify phase/phases the expense budget is included in — Select from any phases in the fee breakdown that are marked as an expense phase, so long as it is not tied to another expense budget, and the phase billing type matches any others already tied to this expense budget.
Set a vendor and standard price — Optionally specify a vendor and price per unit (some types like mileage may have a default price already defined in Settings).
Enter estimated pay to vendor — "Estimated pay to vendor" tracks what you expect to pay.
Specify markup — optionally enter a markup percentage, which will reflect in the spent amount in the phase budget, and will automatically apply the markup to any expenses entered with the expense type associated with the expense budget.
Mark as additional services — Note whether this budget was added after the original contract.
Linking Expense Budgets to Phases
To track expenses alongside your fee breakdown and control how they're billed:
1. Create a phase in the fee breakdown and specify that it's for an expense or subconsultant.
2. Reopen the expense budget, change it to "included in service fee", and link it to that phase.
The type of phase you link to impacts how expenses are billed:
Hourly phases — Individual expense details can be shown and billed on the invoice, including expense attachments.
Fixed fee phases — Expenses are tracked but billed as part of the lump sum. The amount billed depends on the percentage of the phase you bill. This is how you handle expenses bundled into a lump sum. (When invoicing, you should not flip the "Show all expenses" switch and mark an italicized expense as bill now. Italicized expenses indicate that the expense is tied to a fixed fee phase and should be billed from the fixed fee tab of the invoice creator.)
Structuring Subconsultant Budgets
For projects where subconsultant work is included in your fee, you can break phases down to show how much is allocated to each vendor:
1. Create child phases under a parent — one for your firm's budgeted hours and one for each subconsultant.
2. Use the copy feature on the fee breakdown to quickly create these child phases.
3. Associate each subconsultant budget with the appropriate child phase.
4. When allocating budget, the system will guide you in distributing dollars from your proposal amount across phases.
If you frequently include subconsultants on projects and want this structure, consider creating a project template. Factor includes a built-in template with this structure, but you can also create custom templates, even directly from an existing project.