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AE College: Spring

Accounting for Proposal Costs

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4 posts
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Darlene
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Curious how other members account for the cost of developing a proposal/responding to an RFP; pre and post client acquisition.

Thanks!

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Vince
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Good morning Darlene. This all depends on what your reporting objective is. Are you wanting to track disbursements AND unbillable time? Are you wanting to track it against your annual budget? Are you looking to track it against a departmental budget? Happy to discuss further. Sincerely, Vince Dong

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lauriekay
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Hi Darlene:

Many agencies open a "new business" job number in their system and track hours against that. If the business is won, some of these hours can be worked into future estimates for the client. You can open a catch-all job number or do one for each proposal you're working on. Even if you don't try to capture the hours post-win (why wouodn't you?) the tracking will tell you how much time you have spent on new business initiatives. You can also show any expenses against this job in addition to your time.

Laurie

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JeffKlingberg
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I was taught that the cost of writing a proposal needs to be included in the proposal itself along with a factor for client difficulty. So if the cost of services for the proposal you estimate at $5000 and it takes 3 hours to write the proposal at your average blended rate (e.g. $150/hour) then the total fee should be $5,450. If you figure the client is going to be difficult (consume a lot of time) you can add a factor into your proposal as well.

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