TRANSCRIPTION
ZevBit Software Training
Step 2: Creating A Budget
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--- CLIP 1: Budget Setup & Field Labor ---
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[00:00:00]
All right, well welcome to step 2. We have officially finished going through the settings and we are ready to jump into the budget. So go ahead and click on budget in the left-hand tab and we're going to click new budget in the top right. Enter a name, let's say 2026 budget and you can choose between simple and detailed. I'd recommend starting with detailed. Go ahead and click Save and you can go ahead and start entering in the budget information. So as you can see there's these different tabs up here to enter in the different expenses for your company to create your budget. The first one being your field labor. All right, so if you have any field employees you pay by the hour or salary who work for you, you can go ahead and click Add Employee in this blue button right here and you
[00:00:50]
can select between creating a new employee or adding existing. You're going to always select create new here and then you go ahead and select whether you're want to just add them to the system or if you want to invite them as a user. All right, so for your field labor employees, your foreman, your crew members, people working on the job sites, I would probably recommend to just add them to the system for now and then later when you're ready you can switch them to be invited where then they can actually have a login and be able to log into the app and clock in and all that type of stuff. So for now you can add them to the system and then you can later switch them to be invited if you'd like. You can also manage this from the team section. All right, so in the team
[00:01:36]
section you can click Add Employee and you can add anyone else you need here as well. This will connect into the budget so if you add them from here you can then add it in the budget or vice versa. Now anyone that you want to invite like an office person or salesperson, you can go ahead and add them from the team section here and invite them or you can do that also from the budget. All right, so either way works but just know that you can add anyone else you need from your company here and it's going to show these different roles as far as who you're inviting. So these are kind of the defaults. You can click these three dots to edit any of these or add your new own custom roles. From there we're going to
[00:02:21]
go back to the budget, click into this 2026 budget we created and we can continue adding the employees. So I'm going to click Confirm, add to my system and then you can enter in the employee's name. So I'm going to put Test Employee. Actually before we do this I want to show you guys one other thing here in the team module where you can actually go ahead and set up your crews as well. So you can do this at late now or after the fact but you can add crews from here and put in the crew name, the foreman, so you can click Add New Employee from here and set that up. So just know that you could do this later after the fact to assign these different people to a crew. All right, so I just wanted to clarify
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that but let's go ahead and go back to the budget here and let's go ahead and add an employee. So I'm going to go ahead and put Test Employee as the name then I'm going to select the role for this employee. Let's say a foreman, this is a field employee, we're doing field labor right now so you would typically select foreman and crew member here. Then you can enter in their email or phone if you want. These are optional, email will be required if you decide to invite them later but right now they're optional and then you can enter in their type of pay. So this can be an hourly rate or you can switch the salary and then put in their salary amount here. Let's leave it as hourly, you can also see there's an
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overtime factor so if you toggle this on it'll tell the system over 40 hours a week they get time and a half. Then you'll click Next. Here you can assign them to a crew. If you don't have any crews yet just skip over this we can come back to it later and here you can enter in the season's start and end date for this employee. So if they work all year just leave it like this, if they work only certain months of the year you can select those here. From there you select the average days that they work per week. If they work some Saturdays you can just leave it as Monday through Friday, if they work every Saturday then you can add it. Now this is going to be your average hours per day so if they're working some Saturdays and the other days they're working eight
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hours maybe you want to put this to like nine hours or ten hours depending to cover the total amount of hours. What we really care about is that these total hours work this season is accurate so you can see if I add this to nine it'll adjust or ten so just get that as close to where you think they're going to be working total hours. You can also check your last year as far as how many hours they worked or were on payroll for. Alright so go ahead and do that once you're ready click we also have this totals button before you click the save you're going to want to go over here from first season to totals and here you can enter in the unbillable hours per year the overtime hours per year and the bonuses. Alright so unbillable hours per year is any time that your employees are
[00:05:31]
not are clocked in but they're not either on the job site or driving. So this would be time that they're at the shop if their employees clock in and out at the shop in the morning and then go to the job site that would be unbillable warranty time cleaning trucks anytime anything like that. So try and figure out an estimate of how many hours per day or per week that this employee would be unbillable. For example you could say 30 minutes a day for an employee that's two and a half hours a week times let's say 30 weeks over the year or 40 weeks or however you want to calculate it and get that total hours per year and enter that here. You can also adjust that based on any data you have from previous
[00:06:19]
years or information like that is this you can manually enter as the total amount of hours that you think they're going to be unbillable. Most people would not include drive time in that most people will include their drive time in their estimates for their jobs but if that's not how you do your estimates you would want to make sure that's being accounted for. The unbillable hours per year is going to be counted as overhead expense where the rest of the hours are is going to be a direct expense. We also have a total overtime hours per year the same thing here if your employees are working five hours of overtime a week and that's for 30 weeks of the year that's 150 hours so you would put that here. If they're working 10 hours over overtime a week times 30 weeks that would be 300 or 40 weeks 400 so you can adjust that based on how many
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hours overtime they're working on average and over how many weeks of the year. I'm going to put that total number right here and then bonuses you can enter let's say 500 bucks at the end of the year or whatever you can enter that if you'd like. Once we save this you'll see that this has been added here so you can see the total field labor cost the total man hours the average cost per hour so you would repeat this process a couple more times add a couple other employees in here and let's say we have like crew member we would select that here maybe this one's 22 overtime they're working all year eight hours a day they're unbillable maybe let's say it's like 80 hours and their overtime
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is 150 whatever it is for your company so you would just repeat that process for a couple however many employees you have I'm just gonna throw one more in here real quick crew member two maybe this one makes 21 and set the same numbers for unbillable and overtime and then once you're happy with that when you've gotten any of your employees added then you're ready to review the overall numbers as you can see here 150,000 in field labor 6,400 total hours and that's coming out to 2356 per hour on average as you can see these rates
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are a little bit higher than their actual rate I entered and that is because this includes the overtime hours right here being spread out across the total overall average across the whole year so keep that in mind here but essentially once you've added everyone you're good to go they're all gonna show here under unassigned later whenever you want you can come over here to team and you can see these people are not assigned to a crew you can click on these three dots and assign them to a crew here and create a new crew so you would just put in like the foreman is this one and the crew members are these ones and then you would have a crew created so you just put like crew name here and you can set a few other settings like how they're clocking in
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and their colors and stuff like that I'm just gonna click add crew right now you can see these people have been assigned to this crew so that'll show up over here and that'll also show up in the budget as crew name so whatever is the crew name you entered would show here if you had multiple crews you would see separate tabs here to kind of break those out all right so that's gonna be the field labor
--- CLIP 2: Equipment ---
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then we can move on to equipment we have both own and paid off and finance equipment so let's go ahead and click add line for own and paid off this would be anything that you're not making monthly payments on so you have a dump trailer this current value is really gonna be like your replacement cost when you need to purchase a new dump trailer all right so let's say your
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current dump trailer is gonna last you five years or maybe it's only three or four five six seven however many years you think your current dump trailer is gonna last you and you gotta think after these five years or four years or whatever you put here how much you think it's gonna cost you to buy a new replacement dump trailer you're gonna put that right here let's say maybe 13,000 all right then in the estimated sell price you're gonna put how much you think you can sell your current dump trailer for maybe 3,000 and that would be after five more years of use all right so you could be kind of conservative with this maybe it's only 2,000 whatever all right and how this works is it's going to take the difference between these two numbers and it's going to
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spread it out over these five years and that's going to be your annual depreciation cost this number right here is essentially how much money you need to be setting aside each year to make sure that you have the money to purchase a new dump trailer in five years from now all right so you're gonna want to repeat that same process for anything that you are have paid owned or paid off that you're not making payments on trucks trailers mowers whatever it is you enter it here machines skid steers all that type of stuff we even recommend adding compactors and that type of stuff really anything over $3,000 would get added here the smaller items under $3,000 handheld tools and whatnot that can go directly into the overhead tab here all right the this these costs
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right here will be counted as overhead by default as you can see but you can switch them to be billable if you'd like we'd recommend leaving it as overhead most of our users do that and that makes sure that you're recovering that expense without having to specifically add it into the estimate all right so go ahead and do that for all everything that's owner paid off then you can go to the finance tab here click add line and you can enter in any finance equipment so let's say you have a truck that's finance put in the monthly payment here let's say 800 bucks a month and you have two options the most common option would be skipping over these fields and going straight over here on the right side and switching this to say loan payments and what this does is it says the full 800
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bucks a month or ninety six hundred dollars a year is going to be counted as an overhead expense and what that means is that it's being baked into your estimates and your jobs and being recovered through your overhead the full loan payment all right if you instead wanted to do it off of your depreciation you can but then you'd have to enter in these different numbers here to calculate that out most of our users will do it off of the loan payments if you need more additional info you can get a recommendation from your accountant if you're not sure we'd recommend going with the higher number which is usually the loan payments all right from there you could enter any lease if you need and any rental equipment so here on the rentals we
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would just put like rentals and you would just put in how much per month you spend on average thousand bucks a month two thousand five thousand whatever or you could look at how much you spent last year in rentals and put that in right here maybe $20,000 that will automatically divided by 12 to get your monthly all right so that's how that works what as long as this number is correct that's what matters if you don't work all 12 months of the year it's still going to divide it by 12 don't worry about it just make sure that this total annual cost is correct all right from there you can see that all of this is being recovered as overhead and but the rental equipment is going to be billable straight to the job so you can see the 20,000 for the rentals is here
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but this other 11,000 that's being recovered as overhead is not showing up under your equipment and that's because it's going to get fed in here under overhead all right so you can see here we have unbillable field labor we have equipment recovered as overhead and these numbers are getting pushed into this overhead total here based on your specific company and numbers that you have entered all right
--- CLIP 3: Overhead ---
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[00:14:06]
now that we're on the overhead tab this is the most important this is going to have all of your different overhead expenses so overhead labor you're going to want to add anyone in the office sales people project managers you're going to do the same process except most the time you're going to invite these people and in here it's going to show you that there is a user fee now keep in mind this is going to show to everyone no matter what we do
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give some free user seats based on the plan you are on so if you are on the base plan there's just one included user if you are in have the invoicing and change order add-on then you get four free users and if you have the invoicing and the job costing add-ons then you get seven free users so even if you have those free users you're still going to see this a warning about the user fees just go ahead and click confirm you're going to get an automatic promo code for those user seats so you don't have to worry about being charged for that all right then you would enter in your office person or salesperson product manager all of those type of people would come here and your overhead labor additionally we lay out these categories for you to go and fill
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out all right so for example the first one here is fuel you would put in how much per month you're typically spending on fuel you could also pull up last year's P&L and look at how much you spend in fuel and use put that directly here into the annual cost all right and you would go down each of these numbers say I want to budget $5,000 for the year for maintenance we had some repairs so I'm gonna budget some money for that our tires have a couple different trucks and trailers that we need to allocate tires for let's put it in a budget for that registration and renewals we got a plan to get new plates and stickers for our trucks and trailers so we're gonna have some expenses for this tools for the trailer this is gonna be some handheld tools and whatnot for the trailer maybe
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we're gonna put $1,000 for the year of those you know small miscellaneous equipment this would be like demo saws and other stuff like that we're gonna budget some amount for that so you kind of just go through this list you can put annual budgets or monthly depending on what it is for example the next category is ads so you can say I want to budget a certain amount for Facebook or Meta and Google or whatever it is for your company I'm gonna enter those here maybe I want to put in some for a vehicle wrap I'm gonna say $2,000 whatever it is for your company all right and then your insurance you're gonna put in your general liability insurance here and put in your auto insurance put in your workers comp if you're if you have that so put in those
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different expenses here and anything else such as employer payroll taxes if your employees aren't payroll you can figure out what percent it is and based on your total field labor over here you can figure out how much your employer payroll taxes are gonna be so I'm gonna say yeah 15,000 for the year whatever it is for your company uniforms port-a-potty GPS QuickBooks you can put in here ZevBit you can put in here design software if you spend any money on that your accountant and CPA you can budget certain amount for that your bookkeeper whatever the different expenses are you can put in here and you
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can always adjust those either monthly or annual all right shop rent phone bill and office supplies if you don't want to use these you can just put it in any of the fields you can leave anything blank just like this or you can use a trash to delete stuff there's also some personal development travel financial stuff meals so fill out whatever is applicable for you at the bottom you're going to see all of these different categories of overhead expenses and what it's coming out to on a monthly and annual basis all right so once you figure out this number for your company this typically is going to include your equipment your overhead labor office all that stuff once you figure out what
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this is for your company then you can create an overhead recovery plan all right so
--- CLIP 4: Overhead Recovery & Materials & Subcontractors ---
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this is going to work directly when we scroll back up by going directly to the overhead recovery tab all right when you get to this tab you're going to have three different options weighted equal and field labor so I'm going to recommend if you have any field labor to switch it over to field labor first to see where it's coming out to you all right if you don't have any field labor employees and this is zero then definitely stay on weighted but if you do have field labor employees switch it over to this one just to check this out so I can explain how it will how this works okay so what it does is it takes the total overhead cost for your company from this overhead tab and it divides it
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by the total labor hours from field labor and what that gets you is an overhead cost per man-hour of how much it's costing your company every single hour that your employees are working each employee to operate and recover your overhead this is in addition to what you pay your employees so we're paying employees in this example 23 an hour on average our overhead is 35 so the total break-even is 58 an hour in this example now with that being said this rate right here will heavily depend on how much your overhead is compared to how much your field labor is right so if I go and add an additional employee here and I put one more crew member in right so I go and put we have one more crew
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member they make 22 an hour whatever the settings are here for like unbillable and overtime and that type of stuff save that now when we come back here to overhead recovery this rates going to automatically adjust because now we have more billable hours to spread out the same amount of overhead costs so keep that in mind of how this is being calculated it's a ratio between the total overhead and the amount of total hours and that depends on the field labor and the overhead you can see now it's at 26 an hour instead of 35 and the break-even has been reduced to just under 50 an hour this is how much it's
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costing your company to operate to pay the employees and recover the overhead expenses now with this being said you only want to use field labor only recovery if you don't use any subcontractors if you use any subcontractors then you're going to all want to use the weighted overhead recovery and what that allows you to do is enter a markup percent to recover the overhead for your materials and your subcontractors for example I can come here to the materials and I can enter in an expected amount of material cost for example you could say roughly 15,000 a month 10,000 a month whatever it is
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for your company so to multiply that by 12 months in this case now you can adjust these maybe in January it's going to be lower and February you can go and adjust these however needed and same thing at the end of the year however it works for your company you can adjust these however you need and once you do that you can see where it's calculating the rest out so it's going to spread out the rest into the rest of the months here if these are too high then you can decrease this total maybe this is only 160 or whatever and it'll recalculate these for you alright so put this in for how much you're expecting to spend in materials I'm going to say in this case 220,000 and you can of course look at last year's PL to see how much you spent and base it off of that and then you can
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kind of break it out by month to get a rough idea this doesn't have to be perfect this can be super rough based on your different numbers and expenses
--- CLIP 5: Sales Goal ---
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alright so once you kind of have a rough idea on this we totally understand like you might not know how much in materials because it depends on what jobs you do right so we recommend just to base it off of last year or if you don't have that data then just look at the last couple months on average how much you're spending in materials doesn't have to be perfect alright same thing on subcontractors if you use any subcontractors you would put in an average monthly or annual cost I'm gonna say that we're gonna spend about 60,000 in subcontractors this year for whatever items by default it's going to spread
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that out over 12 months you can leave it like that it doesn't really matter if you want you can go and adjust them per month or maybe I know in January and February we're not going to have any so and December whatever you can spread it out over the rest of the months and when you're happy with that when we go back to overhead recovery you will see here that the materials and the subcontractors can have a percent added here that gets allocated towards overhead okay so it says right here markup percent to recover overhead 20% materials 15% on subcontractors and the rest of it goes towards the field labor alright and how this works is you can see that the overhead recovery and the break-even
[00:24:31]
point has been reduced on the field labor compared you can see here it's at 43 an hour break-even versus if I do it all through field labor it's at 49 50 an hour and the reason that this is getting to reduce is because some of the overhead is being recovered through the materials and the subcontractors now it's up to you if you want it on materials or not some users will zero this out and they'll just keep it on their subcontractors that way if they subcontracted a job it's still out recovering overhead and if they do field labor of course it's recovering overhead but the materials they don't need a recover overhead and through so that's up to you on how you want to set that up
[00:25:16]
totally customizable for your company all right like I said if you don't use any subcontractors then you can just stick with the field labor only recovery so I'm going to do that for now but I'm going to leave it on weighted overhead recovery for now and we're going to put in the overhead being recovered to the subs but we're going to zero it out on the equipment and the materials in this example and you can see my break even on labor 90% of my overhead is being recovered through my labor 5% is being recovered through subcontractors so you'll be able to see out see what these numbers are looking like for your company when you're happy you can click over to sales goal and you can see where it's calculating everything out at all right so you can see here the break even
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this is your total cost to cover your materials your subcontractors overhead all your different expenses and then you can see that broken out between labor materials etc alright then you can set your profit margin goals for how much profit you want to make on labor materials subcontractors etc and over here on the left side you're going to see the average as well as a estimated sales goal based on the numbers that you have entered now if you want to edit this you can I could type in I want to do a million in sales here and it'll tell me what percent profit I need now this will be automatically applied to each of these but most people would have a higher percent on labor for example
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maybe 35 and then 20 on the materials or whatever it is to get to that goal so you can type in the number here or you can adjust these percentages here and it'll recalculate on the left side now as you're entering this profit percent for field labor you can see this man hour rate is going to be calculated out so this is going to be based on what your break-even is and how much profit you want to make on labor to calculate out what you need to be charging per man hour for your company to cover all of your expenses and make the profit you're aiming for now you can skip over this part if you don't do subcontractors but for example I can go back to overhead and maybe I have some overhead that I
[00:27:44]
haven't added yet maybe I have an office person that we haven't added in here so I'm going and I click invite and I would put in office manager I put in their name here admin office put in their email select salary maybe this office person makes 70,000 a year and hit next and save so now what we what we just did is we add an additional $70,000 in overhead right so now when we come back to overhead recovery all of a sudden our break-even point went up all right you also will need to readjust this and when you make certain changes so if you don't
[00:28:32]
want it on materials make sure you just that you can see our break-even is up to 57 an hour so now when we come back to the sales goal if we put this at 30% we're going to be at 74 an hour if we put it at 40% gonna be at 86 an hour so you can see how the the by adding more overhead will directly affect what your rate is that you need to be charging to make the amount of profit you're aiming for so in my case I'm going to leave it at 30% on labor 20% on the rest it's 25% average million-dollar sales goal 74 per man-hour and but you can adjust that based on your your location what you need what you're charging what your profit is and your specific numbers for your company all right last thing here
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and the sales goal is we'll give you some additional graphs here also give you some overall reporting as far as gross profit and net profit and we'll also show you monthly reporting on what your sales goal needs to be per month to hit these different numbers when we scroll down to the roadmap that sales goal is going to be translated here you can click this average job price this little pencil icon right here set your average job price maybe $15,000 and it will calculate out how many jobs you need to sell per month to hit that sales goal now based on this how many jobs you need to sell per month and your closing ratio right here you can click that pencil icon to edit that it's going to tell you how many estimates you need to be sending out each month to hit these
[00:30:08]
different numbers and then based on what percent of leads you actually have turned into estimates it'll tell you how many leads you need to be receiving so this is really just kind of breaking it out for you to plan things out this doesn't actually have any direct effect within the system other than just giving you kind of some roadmap to plan out how many leads and how many estimates you need to be sending out finally we have some additional reporting and options down here to show you how all the numbers break out and what percent is going towards what so that's the full budget right there when you're ready you can click save budget hit save as default and this budget will be now activated all right if you're not ready to activate it you can click save as
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draft instead so when we click save we can do it as draft instead and you can always come back to it later by just clicking on the budget from the left side and then clicking into the budget so that's how the budget works please reach out if you guys have any questions as things update in the future you definitely want to revisit and update this when needed so you can always come in here and make adjustments you can also go to the three dots and you can duplicate this budget if you want to compare different scenarios what happens if I add another employee what happens if I buy this piece of equipment what time what happens if I increase our ad budget and you can see how that's going to affect your numbers you want to be proactive with your budget the reason is because the estimates you're sending out now you might not be doing the job
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for a couple of months so that means you always want to be a couple of months ahead of when you're actually because you're because you wanted this to be included in the estimates you're sending out now right so just keep that in mind always be proactive and updating the budget whenever something changes if you have an updated budget you would definitely want to be doing this on a quarterly basis all right so reach out to us with any questions you have and we hope this is a helpful tool to plan everything out and get more insights into your overhead recovery and how the system works as far as that goes please reach out with any questions and we will see you in step 3 thank you
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End of Transcription — Step 2: Creating A Budget