The current model, implemented by the company I work for, to calculate internal costs per resource is not working efficiently.
Until now we were using the averages per role ( for example, average internal cost per Partner, per Associate, per Analyst) and this is how the costs were distributed.
However, what we charge the clients is unique per individual - any two Partners /Associates etc. charge differently when on the client side.
What is the best way to build a model that actively takes into account the activities and hours spent, together with the overall contribution to the pot in the company?
1. Do you consider Activity-based costing as a solution? Or
2. Do you think there should be a proportion-wise way- your internal costs depend on how much you charge a client? However, there are fixed costs that should be equally distributed to all resources.
On the other side, if implementing a live track of total days worked, the management doesn’t want to drive the culture of - ‘take no holiday days ‘ as this will increase your internal cost for the company ( income brought/ hours worked).
Many thanks for the suggestions,