Rates, and what an hour is worth
Each person carries two hourly rates — what they cost the firm, and what an hour of their work is worth — and with them Vylan can put a value on the time your firm records. Without rates you still get hours — you simply do not get dollars, which is the honest answer rather than zero.
Hours on their own answer "where did the week go". Hours with a rate on them answer "is this client worth what we charge them", which is the question that actually changes what a firm does.
Setting them
Rates are per person and live with the rest of your team's settings, under Hourly rates — Set rates in team settings is the shortcut from the insights screen itself.
There are two of them, and they answer two different questions. Cost rate is what the person costs the firm for an hour; it is what fills labor cost, estimated margin and clients in the red. Billable rate is what an hour of their work is worth at your standard charge-out rate; it is what fills the Billable lens and the comparison between what a job charged and what its hours were worth. Both are internal — neither one ever creates an invoice.
A rate applies from when you set it. Changing somebody's rate does not rewrite what their past hours were worth, which is what you want: last quarter's numbers should not move because of a raise this quarter.
What happens with no rate
Time recorded by somebody with no rate carries no money value at all. It is left out of a dollar total rather than counted as nothing.
This matters more than it sounds. Counting an unrated hour as $0 would quietly report that the work was worthless, and a firm reading a profitability number would be reading a number built partly from people it never priced. Hours you can see, dollars you cannot — that is the truthful version. Where a total leaves hours out for want of a rate, the card says how many were excluded rather than folding them in at nothing. An hour marked not billable is different: its value is known, and it is nothing, so it counts as $0.
Estimated on an Insights margin is not a flag for that mix. It means the figure is revenue collected minus labor cost — the hours at cost rates — with rent, software and the rest of the firm's overhead left out, so it is the margin on the work rather than the profit of the firm. The same word sits beside other figures on that page with a different sentence each, because they are different sums; hover it and you get the one for the number it is attached to. See Insights.
Rates are for valuing time. What you actually charge a client is set on the engagement and its invoice — see creating an invoice.