SYSTEM AND METHOD FOR DEFINING BILLABLE LABOR BY SETTING PROFIT

US 20070276742A1
Filed: 04/26/2007
Published: 11/29/2007
Est. Priority Date: 05/24/2006
Status: Active Grant

First Claim

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1. A method for ensuring a desired profit percentage in a business that provides a service for fees, the method comprising:

receiving electronic sales information representing a sum of fees received for providing the service;

receiving electronic inventory cost information representing a cost of goods sold during while providing the service, wherein the receiving of the electronic inventory cost information occurs only when goods are sold during while providing the service;

receiving electronic equipment cost information representing a cost of equipment used during while providing the service, wherein the receiving of the electronic equipment cost information occurs only when equipment is used while providing the service;

receiving electronic billable labor cost information representing a cost of billable labor;

receiving electronic non-billable labor cost information representing cost of non-billable labor;

receiving electronic overhead cost information representing a cost of overhead;

receiving an electronic profit percentage value representing a percentage of the fees charged for the service to be allocated for profit;

calculating a gross margin percent value representing a difference of the sum of fees and the cost of inventory;

calculating a portion of the fee for the service attributed to billable labor; and

calculating a fee for the service wherein at least a portion of the fee is calculated as a function at least one of the electronic inventory information, the electronic equipment information and the electronic overhead information, and further wherein a profit value realized by the fee for the service is the percentage represented by the electronic profit percentage value.

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Abstract

In accordance with a preferred embodiment, the present invention comprises a system and method for ensuring a desired profit percentage in a business that provides a service for fees. Businesses will know what prices to charge for any profit level desired. Three profit areas can be used to arrive at a service fee; labor, equipment, and inventory. Input of a desired profit will automatically recalculate how billable labor is charged out in each billable labor dollar of revenue. Preferably, electronic sales information is received that represents a sum of fees received for providing the service. Further, electronic inventory cost information is received that represents a cost of goods sold during the course of providing the service. Moreover, electronic billable labor cost information is received that represents a cost of billable labor, and electronic non-billable labor cost information representing cost of non-billable labor. Furthermore and in a preferred embodiment, electronic overhead cost information is preferably received that represents a cost of overhead. An electronic profit percentage value is preferably received that represents a percentage of fees charged for the service to be allocated for profit. Also, a portion of the labor fee charged is calculated to represent billable labor, non billable labor, and overhead.

Citations

51 Claims

1. A method for ensuring a desired profit percentage in a business that provides a service for fees, the method comprising:
- receiving electronic sales information representing a sum of fees received for providing the service;
  
  receiving electronic inventory cost information representing a cost of goods sold during while providing the service, wherein the receiving of the electronic inventory cost information occurs only when goods are sold during while providing the service;
  
  receiving electronic equipment cost information representing a cost of equipment used during while providing the service, wherein the receiving of the electronic equipment cost information occurs only when equipment is used while providing the service;
  
  receiving electronic billable labor cost information representing a cost of billable labor;
  
  receiving electronic non-billable labor cost information representing cost of non-billable labor;
  
  receiving electronic overhead cost information representing a cost of overhead;
  
  receiving an electronic profit percentage value representing a percentage of the fees charged for the service to be allocated for profit;
  
  calculating a gross margin percent value representing a difference of the sum of fees and the cost of inventory;
  
  calculating a portion of the fee for the service attributed to billable labor; and
  
  calculating a fee for the service wherein at least a portion of the fee is calculated as a function at least one of the electronic inventory information, the electronic equipment information and the electronic overhead information, and further wherein a profit value realized by the fee for the service is the percentage represented by the electronic profit percentage value.
- View Dependent Claims (2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25)
- - 2. The method of claim 1, wherein the portion of the fee covers a percentage of the amount paid for billable labor, a percentage of the amount paid for non-billable labor, a percentage of the amount paid for overhead and the desired profit percentage.
  - 3. The method of claim 1, wherein the electronic billable labor cost information is calculated as a function of a labor rate.
  - 4. The method of claim 3, wherein the labor rate is calculated by:
    - $\frac{\begin{matrix} billable labor cost per billable minute * \\ productivity factor \end{matrix}}{billable labor percentage value.}$
  - 5. The method of claim 4, wherein the billable labor cost per billable minute is calculated by:
    - $\frac{(billable labor cost)}{\begin{matrix} (billable weeks per year * hours per work week * \\ minutes per work hour) . \end{matrix}}$
  - 6. The method of claim 5, wherein the billable labor cost is calculated by:
    - wages+benefits+employer taxes.
  - 7. The method of claim 6, wherein the wages include amount wages paid to billable labor, benefits paid to billable labor and employer taxes paid for billable labor.
  - 8. The method of claim 5, wherein the billable weeks per year is calculated by:
    - total paid work weeks−
      
      paid time off in weeks.
  - 9. The method of claim 4, wherein the productivity factor is calculated by:
    - $\frac{(hours per work period)}{(billable hours per work period) .}$
  - 10. The method of claim 4, wherein the billable labor percentage value is calculated by:
    - gross margin percent−
      
      non-billable labor percent−
      
      overhead percent−
      
      desired profit percent.
  - 11. The method of claim 1, further comprising defining a labor rate value to be applied to for all billable labor to calculate the electronic billable labor cost information.
  - 12. The method of claim 11, further comprising overriding the labor rate value for a respective category of labor.
  - 13. The method of claim 11, further comprising overriding the labor rate value for a respective person providing labor.
  - 14. The method of claim 1, wherein a second portion of the fee includes a charge for equipment used while providing the service.
  - 15. The method of claim 14, wherein the charge for equipment is calculated by:
    - replacement cost per use+return on investment charge per use+maintenance and supply cost per use+maintenance and supply mark-up percent.
  - 16. The method of claim 15 wherein the replacement cost per use is calculated by:
    - $\frac{[\frac{(equipment cost)}{(equipment life span)}]}{(number of uses per year)} .$
  - 17. The method of claim 15 wherein the return on investment charge per use is calculated by:
    - $\frac{(equipment cost * return on investment percent)}{(life span) * (number of uses per year)} .$
  - 18. The method of claim 15 wherein the maintenance and supply cost per use is calculated by:
    - $\frac{(maintenance and supply costs)}{(number of uses per year)} .$
  - 19. The method of claim 15 wherein the maintenance and supply mark-up percent is calculated by:
    - $\frac{(maintenance and supply costs * mark - up percent)}{(number of uses per year)} .$
  - 20. The method of claim 1, wherein a second portion of the fee includes associated inventory charge per use or outside service charge while providing the service.
  - 21. The method of claim 20, wherein the inventory charge per use is calculated by:
    - cost of inventory per use+inventory mark-up per use.
  - 22. The method of claim 21 wherein the cost of inventory per use is calculated by:
    - $\frac{cost of inventory}{number of units of inventory} .$
  - 23. The method of claim 21 wherein the inventory mark-up per use is calculated by:
    - $\frac{(cost of inventory * mark - up percent)}{(number of units of inventory)} .$
  - 24. The method of claim 20, wherein the outside service charge is calculated by:
    - (cost of outside service+outside service mark-up charge).
  - 25. The method of claim 24 wherein the outside service mark-up charge is calculated by:
    - cost of outside service*mark-up percent.

26. A system for ensuring a desired profit percentage in a business that provides a service for fees, the method comprising:
- a sales information module operable to electronically receive electronic sales information representing a sum of fees received for providing the service;
  
  an inventory cost module operable to electronically receive electronic inventory cost information representing a cost of goods sold during while providing the service, wherein the inventory cost module receives the electronic inventory cost information only when goods are sold during while providing the service;
  
  an equipment cost module operable to electronically receive electronic equipment cost information representing a cost of equipment used during while providing the service, wherein the equipment cost module receives the electronic equipment cost information only when equipment is used while providing the service;
  
  a billable labor cost module operable to receive electronic billable labor cost information representing a cost of billable labor;
  
  a non-billable labor cost module operable to receive electronic non-billable labor cost information representing cost of non-billable labor;
  
  an overhead cost module operable to receive electronic overhead cost information representing a cost of overhead;
  
  a profit percentage module operable to receive an electronic profit percentage value representing a percentage of the fees charged for the service to be allocated for profit; and
  
  fee for service module operable to calculate a gross margin percent value representing a difference of the sum of fees and the cost of inventory, operable to calculate a portion of the fee for the service attributed to billable labor and further operable to calculate a fee for the service wherein at least a portion of the fee is calculated as a function at least one of the electronic inventory information, the electronic equipment information and the electronic overhead information, and further wherein a profit value realized by the fee for the service is the percentage represented by the electronic profit percentage value.
- View Dependent Claims (27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50)
- - 27. The system of claim 26, wherein the portion of the fee covers a percentage of the amount paid for billable labor, a percentage of the amount paid for non-billable labor, a percentage of the amount paid for overhead and the desired profit percentage.
  - 28. The system of claim 26, wherein the electronic billable labor cost information is calculated as a function of a labor rate.
  - 29. The system of claim 28, wherein the labor rate is calculated by:
    - $\frac{billable labor cost per billable minute * productivity factor}{billable labor percentage value} .$
  - 30. The system of claim 29, wherein the billable labor cost per billable minute is calculated by:
    - $\frac{(billable labor cost)}{\begin{matrix} (billable weeks per year * hours per work week * \\ minutes per work hour) \end{matrix}} .$
  - 31. The system of claim 30, wherein the billable labor cost is calculated by:
    - wages+benefits+employer taxes.
  - 32. The system of claim 31, wherein the wages include amount wages paid to billable labor, benefits paid to billable labor and taxes paid for billable labor.
  - 33. The system of claim 30, wherein the billable weeks per year is calculated by:
    - total paid work weeks−
      
      paid time off in weeks.
  - 34. The system of claim 29, wherein the productivity factor is calculated by:
    - $\frac{(hours per work period)}{(billable hours per work period)} .$
  - 35. The system of claim 29, wherein the billable labor percentage value is calculated by:
    - gross margin percent−
      
      non-billable labor percent−
      
      overhead percent−
      
      desired profit percent.
  - 36. The system of claim 26, further comprising a labor rate module operable to define a labor rate value to be applied to for all billable labor to calculate the electronic billable labor cost information.
  - 37. The system of claim 36, further comprising an override module operable to override the labor rate value for a respective category of labor.
  - 38. The system of claim 37, wherein the override module is further operable to override the labor rate value for a respective person providing labor.
  - 39. The system of claim 26, wherein the fee for service module is further operable to calculate a second portion of the fee that includes a charge for equipment used while providing the service.
  - 40. The system of claim 39, wherein the charge for equipment is calculated by:
    - replacement cost per use+return on investment charge per use+maintenance and supply cost per use+maintenance and supply mark-up percent.
  - 41. The system of claim 40 wherein the replacement cost per use is calculated by:
    - $\frac{[\frac{(equipment cost)}{(equipment life span)}]}{(number of uses per year)} .$
  - 42. The system of claim 40 wherein the return on investment charge per use is calculated by:
    - $\frac{(equipment cost * return on investment percent)}{(life span) * (number of uses per year)} .$
  - 43. The system of claim 40 wherein the maintenance and supply cost per use is calculated by:
    - $\frac{(maintenance and supply costs)}{(number of uses per year)} .$
  - 44. The system of claim 40 wherein the maintenance and supply mark-up percent is calculated by:
    - $\frac{(maintenance and supply costs * mark - up percent)}{(number of uses per year)} .$
  - 45. The system of claim 26, wherein the fee for service module is further operable to calculate a second portion of the fee includes associated inventory charge per use or outside service charge while providing the service.
  - 46. The system of claim 45, wherein the inventory charge per use is calculated by:
    - cost of inventory per use+inventory mark-up per use.
  - 47. The system of claim 46, wherein the cost of inventory per use is calculated by:
    - $\frac{cost of inventory}{number of units of inventory} .$
  - 48. The system of claim 46, wherein the inventory mark-up per use is calculated by:
    - $\frac{(cost of inventory * mark - up percent)}{(number of units of inventory)} .$
  - 49. The system of claim 45, wherein the outside service charge is calculated by:
    - (cost of outside service+outside service mark-up charge).
  - 50. The system of claim 49, wherein the outside service mark-up charge is calculated by:
    - cost of outside service*mark-up percent.

51. A method for project service fees based on any desired profit percent, the method comprising:
- receiving a desired profit level and service costs, wherein the service costs include at least a production cost, an overhead cost and an labor cost;
  
  automatically calculating a service fee as a function of the desired profit level and the service costs, wherein the service fee covers the service costs and the profit percent;
  
  receiving a modified desired profit percent or modified service costs, or receiving a modified desired profit percent and modified service costs; and
  
  automatically calculating a modified service fee as a function of the modified desired profit percent or the modified service costs, or the modified desired profit percent and the modified service costs, wherein the modified service fee covers the modified service costs or the modified profit percent, or the modified service fee covers the modified service costs and the modified profit percent.

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Current Assignee
Profit Solver LLC
Original Assignee
Danny P. Zalta
Inventors
Zalta, Danny P.

Granted Patent

US 7,742,957 B2
Time in Patent Office

Days
Field of Search
US Class Current

705/30
CPC Class Codes

G06Q 10/0637   Strategic management or ana...

G06Q 10/087   Inventory or stock manageme...

G06Q 20/201   Price look-up processing, e...

G06Q 20/203   Inventory monitoring

G06Q 30/04   Billing or invoicing

G06Q 30/06   Buying, selling or leasing ...

G06Q 40/00   Finance; Insurance; Tax str...

G06Q 40/12   Accounting

G06Q 40/123   Tax preparation or submission

G06Q 40/125   Finance or payroll

G06Q 40/128   Check-book balancing, updat...

SYSTEM AND METHOD FOR DEFINING BILLABLE LABOR BY SETTING PROFIT

First Claim

3 Assignments

0 Petitions

Accused Products

Abstract

Citations

51 Claims

Specification

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SYSTEM AND METHOD FOR DEFINING BILLABLE LABOR BY SETTING PROFIT

First Claim

3 Assignments

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0 Petitions

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Accused Products

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Abstract

Citations

51 Claims

Specification

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Solutions

Use Cases

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