Agency scope creep cost checker

This is the actual billable revenue your agency forfeited by absorbing the extra work instead of charging for it.

• Total unbilled hours is the extra hours a week times the weeks they've gone on: the work the client got and didn't pay for.
• Each further week is what another week at this pace adds, and full-time people absorbed is the extra hours a week as a share of a 40-hour week.
• With the agreed scope, the tool shows how far past it the free hours go and what an hour worked earns once the fee covers them too.
• With what an hour of the team costs, it shows what the free hours cost to staff, and with the scope as well, the project's margin as priced and after the free hours.

The tool multiplies the average weekly hours your team spends on out-of-scope work by the number of weeks the project is delayed. It then applies your blended hourly rate to reveal the monetary value of that unbilled labour.

Scope creep is common: in the Project Management Institute's 2021 survey it affected 34% of projects, and 33% in IT.

1. Total unbilled hours = unbilled extra hours per week × weeks delayed.
2. Revenue lost to free work = total unbilled hours × blended hourly rate.
3. Each further week = unbilled extra hours per week × blended hourly rate.
4. Full-time people absorbed = unbilled extra hours per week ÷ 40.
5. Beyond the agreed scope = total unbilled hours ÷ hours in the agreed scope.
6. What an hour worked earns = blended rate × hours in the scope ÷ (hours in the scope + total unbilled hours).
7. What the free hours cost to staff = total unbilled hours × what an hour of the team costs.
8. Project margin = 1 − hour's cost × (hours in the scope + total unbilled hours) ÷ (blended rate × hours in the scope), against 1 − hour's cost ÷ blended rate as priced.

Assumptions

• Every unbilled hour could have been billed at the blended rate, so the figure is the change order that wasn't sent, not the profit on it.
• The rate is before VAT or GST, which a client pays on top and you pass on to the tax authority.
• What an hour worked earns assumes the fee covers the agreed hours at the blended rate.
• Outside the US, the example rate scales the brief's $125 an hour by each country's example salary in the bench cost calculator. It's a starting point to replace with your own, not a market rate.
• Amounts are rounded down to the whole unit, hourly amounts to the cent and hours to one decimal.

This calculation measures direct lost revenue on the current project. It does not account for the cascading opportunity cost of your developers being unavailable to start the next scheduled, paying client.

• Your own estimate. Hours spent because the work was under-estimated aren't the client's new asks, so they aren't billable; only the lesson is.
• Rework on defects. Fixing bugs the team introduced is usually inside the price, not scope creep.
• A contract that bills changes. If the contract lets you charge for changes, the figure is still recoverable: send the change order.
• Paid overtime. If the extra hours are paid as overtime, they cost more than the usual hour; the country rules show whether the law adds a premium for developers.
• The final invoice. A project that runs over usually pushes its last invoice back too, and the cash arrives later than planned.

To cost the developers' time between projects, use the bench cost calculator.