Phase margin
Phase margin is a sub-tab of a project's Project financials. It gives one row per phase of the project, with what the phase invoiced, what it cost and the margin between them, and a last row for the project as a whole.
It answers one question: which stages of this engagement are earning, and which are not.
A phase is a sub-project
There is no separate phase object. A phase of a project is a sub-project of it, so everything true of a project is true of a phase: it has its own type, its own dates, its own team and its own money. To get a phase, create a sub-project of the client project — on the project's Phases tab, or by giving an existing project a parent. Projects View covers both routes and what they mean for team access.
Only the first level is a phase. The rows on this table are the project's direct sub-projects. A sub-project of a sub-project is not a second phase and gets no row of its own — its figures are rolled into the phase above it, because every row covers its phase and everything underneath it. So breaking a phase down further is a way of organising work, not a way of adding rows here.
A phase that has been deleted is left out. A phase that has been archived keeps its row, marked Archived: archiving retires a project, and the money it made is still part of the engagement's history.
When a phase closes, and what a close does not do
A phase closes on its own Date To. It runs through the whole of that day and reads Finished from the day after, next to its name; until then it reads Active, and the row says Closes with the date. A phase with no end date says No end date and stays active.
Closing a phase does not freeze its figures. A cost dated after the close still raises that phase's cost and still lowers its margin. That is deliberate: a close marks when the work was meant to end, not when the books shut, and a supplier invoice that arrives six weeks later is a cost of the phase it was incurred on, not of whatever phase happens to be open.
So that a late cost is never a surprise, the phase's row also says how much of its cost is dated after the close — for example 4,200.00 after close. Read it as an annotation, not as an extra column: that amount is already inside the labour and direct cost beside it, and adding it to them would count it twice. A large figure there is worth following up, because it usually means either a cost booked to the wrong phase or a close date that was set too early.
What the margin is made of
The table carries six columns.
| Column | What it means |
|---|---|
| Phase | The phase, its status, its close date, and its costs after close when there are any. |
| Invoiced | What the phase invoiced. |
| Labour cost | What the time logged on the phase cost. |
| Direct cost | The phase's related costs. |
| Margin | Invoiced minus labour cost minus direct cost. |
| Margin % | The margin as a share of what was invoiced. |
The detail behind each of them:
- Invoiced is what was billed, not what was paid. Every outgoing invoice line booked on the phase counts, from the moment the invoice exists, whether or not the client has paid it. Drafts and deleted invoices are left out. An invoice counts in the window its sale date falls in. A line that names no project is attributed to the project of the contract the invoice was raised under, and a line split across several projects contributes only the share allocated to this phase. Amounts are net, converted at the invoice's own rate.
- Labour cost is logged time at cost, not at the rate you bill. It is the cost of the hours team members logged on the phase, each at their own cost rate — the same figures Team costs over time and the project's money KPIs report. Hours nobody logged cost nothing here, however much work was done.
- Direct cost is the phase's related costs — the supplier invoices and payments booked against it. A cost is counted once: where a bank payment is already covered by an allocated document, the document is what counts, and the payment is not added to it. Money received on a phase is not a cost; revenue is the invoice.
- Margin is a subtraction, not a ratio. A positive margin is shown with a plus sign.
- Margin % is blank when nothing was invoiced. The cell shows a dash and the reason — nothing invoiced — rather than 0%. A margin over nothing is not a percentage, and printing one would read as a phase that broke even when it in fact spent money and billed none.
The period decides what you see
Above the table is a date range, and every figure obeys it. The tab opens on the project's whole life — its start date to today — so the first thing you see is the engagement in full. A project with no start date opens on the current month instead.
Narrow the range and the rows narrow with it. A phase that finished in the spring reads as a row of zeroes in a window that does not reach back to it; that is the window, not the phase. Widen the range to the project's start to see it again. The range travels in the page's address, so a particular window can be linked or bookmarked.
Whole project is not the sum of the phases
The last row, Whole project, is the project in full: every phase, plus anything booked on the parent project itself.
Invoices raised on the project rather than on one of its phases, time logged against the project directly, and costs allocated to it all belong to the project and to no phase. They are in this row and in none of the rows above it. So the total is usually larger than the phases added up, and it is not meant to reconcile with them. If the gap is larger than you expect, it is telling you how much of the engagement is booked at project level — which is often a reason to move that work onto a phase.
A contractor who both invoices and logs time is counted twice here
This is the one figure on this tab to read with care.
When the same person both invoices the work and logs their hours against the phase, this tab counts both: the invoice as a direct cost, and the logged time as a labour cost. The work is paid for once and counted twice, so the phase's cost is too high and its margin reads lower than it really is.
It applies to the phase that contains such a person, and to the Whole project row through it. A phase staffed only by employees, or only by contractors who do not log time, is unaffected.
This is particular to this tab. On the budget surface the same situation is counted once — an invoice allocated to a person is left out of the cost on a project where that person's logged time is already costed, as Budget P&L & forecast describes. The two surfaces genuinely differ, so a phase margin and a budget figure covering the same people are not expected to agree.
Until you have checked, treat the margin of such a phase as a floor rather than a figure: the real margin is that number plus whatever the person invoiced for hours they also logged. Related costs lists the invoices behind the direct cost, and Team costs over time the logged hours behind the labour cost, which is where the overlap can be seen.
Who can see it
Phase margin shows what the work earns, so it needs the permission to view project profitability — the same permission the rest of Project financials needs. Someone without it is told they have no access to the figures rather than being shown an empty table. See Permissions and Permission groups.
A project with no phases says so on the tab, and points you at Team costs over time for the project's own figures.
Example use cases
- A delivery lead running a build in four phases checks which of them is carrying the engagement and which is eating the margin, before quoting the next stage.
- A controller sees after close on a phase that ended last quarter, opens Related costs, and finds a supplier invoice that was booked on the wrong phase.
- A finance lead compares the Whole project row with the phases and discovers that most of the project's invoicing was raised at project level, so the phase margins describe only part of the engagement.
- An account manager reads a blank Margin % on a phase and recognises it as a phase that has spent but not yet billed, rather than a phase that broke even.
- A project manager reviewing a phase staffed by a contractor who logs time treats its margin as a floor, and checks the contractor's invoices against their logged hours before reporting the figure.