Labor Costing

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Posted on by JenWal

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Hello!

I'm working with a customer who is new to T&E and will soon be using SL's Payroll. In setting up their T&E, they discussed using a rate table with average rates of employees for their Project costs (reports, etc. they want to see the average rate, not the employee's rate). The FUPE method will pick up what's in the Rate Table first, and that is what is flowing over to payroll. While this is working great for the reports portion, the average rate that is being picked up is not the employee's true rate that they will be paid when it gets to payroll.

We thought about omitting the rate table on the T&E side and using the employee's true labor rate. This would be great for payroll, however when the customer runs reports they won't be seeing the average rate as they would like. Eventually, they plan to use Flexible Billings and Allocator. I am currently unclear if they will be billing the average rate or the true rate, however I know that if they wished to bill the average it's easy enough to plug in the Rate Table ID and Allocation Method to bill the average cost.

Is there a way in Project T&E where hours could be the employee's true labor cost, but status reports etc are in Standard Cost? The Help files have given wonderful information, but do not appear to address this specific scenario.

Thanks!

-Jenny W.

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JohnTwohig 140 on at

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RE: Labor Costing

I know this thread is old but I am wondering if you, or anyone else, has found a good solution. I am surprised I don't see more companies with this issue. On one hand we want to use things like Web Apps and Business Portal to give as much information as possible to project managers and others. On the other hand I expect that in many, if not most, jurisdictions having those tools show actual salaries and pay rates to so many people is contrary to privacy legislation.

In many cases the solution is to use average rates as you mention above or standard labour costs (A standard cost for each classification is easy to administer) for all project reporting. However, that requires finding some other method for calculating pay rates for payroll.

In our case we use standard costs in our projects. We have a line in our allocation methods that retrieves actual pay rates for each labour record and posts them to a special pay project that most people do not have access to. We then extract the information from that project to get the actual pay for each person. It also enables an audit trail so that we can compare differences between actual and standard costs.

The difficulty is that SL allows only one rate table per project so instead of having one rate table of actual pay rates they must be entered into every rate table because we won't know for sure beforehand which projects any individual will work on.

I would certainly like to know if anyone has found a good solution to this.
Carolyn Kolpien on at

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RE: Labor Costing

Hi Jenny,

The question isn’t real clear, but by ‘status report’ I assume you are referring to the labor cost. So to use an example, assume the employee’s pay rate is 25.00 per hour (assuming an hourly employee) and the ‘standard labor rate’ is 40.00 per hour. It sounds like you want to send 25.00 per hour to payroll, but report labor cost as 40.00 per hour. The only way I see to do that is using allocator to mark the labor up to the standard rate.

Let me know if we have correctly understood the issue.