Jon Crisp

It's interesting to me that accountants think labor hour = cost. A labor hour is not a cost (unless you pay employees hourly). An annual salary is a cost. When you acknowledge this, you will then struggle with the idea of tracking profits per project. Here's why: If I pay an employee $100k and expect them to work FT (2000 hrs/year), their cost per hour is $50. But what happens when they work 2100 hours? Did I realize a 100% margin on the extra 100 hours? Or do I retroactively apply a reduced hourly cost to all prior projects thus arbitrarily inflating my profit per project? What if the employee only works 1900 hours because they don't work much in December... is the profit per project now worse on all prior projects? This is why we don't track profit per project. It's a made up metric.