For most projects, labour forms a big component of the overall costs of the project. As with any other costs, PPO allows for this labour cost to be recorded against the project at the detail that is required.
The ability to track summarised labour cost against budget and actual amounts, is especially important for external facing projects where the labour cost is invoiced to clients.
When tracking your labour cost, you have 2 options available. They are:
1. Manually capture the labour cost; or
2. Automate the labour cost
Let’s look at these options in detail below.
Option 1: Manually capturing the labour cost
To manually capture your labour costs, using the standard PPO cost entity, access the cost list and select the applicable project. Complete the applicable category and select “Labour” as the Sub-Category. Enter the budget and actual/spent for the resources on the project and then submit.
Where would you find the information to manually capture the labour cost on the project?
Well, the budget as in the above example would typically come from the proposal that has been approved by the client. The actual / spent amount could be obtained from supplier invoices if you are outsourcing staff specifically for the project or, in the case of internal staff, it would come from your timesheet or billing system. You can also use the project costing report as a source of information when manually capturing the labour costs on a monthly basis. Access the report here.
I am sure you will agree that capturing the costs manually is a very time consuming exercise, which needs to be regularly repeated as the project progresses. So the next option would be to automate the above mentioned process.
Option 2: Automating the labour cost
To set up automated labour costs one requires two Business Rules. These business rules relate to the Time Entry entity. These rules are set up exactly the same, with the only difference being the event it triggers on, one being on “Add and Update” and the other on “Delete”.
These business rules and required web services are already available on your instance, and if not, simply log a support call and the support team will gladly assist you in setting this up.
Let’s assume all has been setup on your instance as above.
Now let’s look at the automation of the labour cost in action, by using Joe Bloggs as an example.
The first example shows what happens when time entry records are ADDED by a user.
- Joe’s Standard Charge Out Rate = $900
- The rate to use on the project is set to use the “Standard Charge Out Rate”, as below.
- Initially the project starts with an empty cost list.
- Then Joe Bloggs captures his time for the last week of August.
- The following cost record is then automatically added to the project once Joe submits his time entries. It therefore simply took the 2 hours that Joe booked and multiplied it by his standard charge out rate which is $900 and added an actual / spent on the cost list of $1800.
The next example shows what happens when time entry records are UPDATED by a user.
- Joe Bloggs already spent some time on this project in the previous month and adds this to his time entries.
- The previous months’ time entry is then added to the project costs (for July).
- Joe updates his time entry record again, by adding an hour on the billable entry for Monday.
- The actual / spent on the cost records is then automatically updated from 2 hours to 3 hours with a charge out rate of $900 per hour.
The next example shows what happens when time entry records are DELETED by a user.
- Joe then realises that his time entry records for the end of August should not have been billable so he “un-check’s the billable flag on the time entry record.
- The cost record is once again automatically updated. It should be noted that a cost record is not deleted but it is “zeroed” if all time related entries are removed or if the billable flag is un-checked.
From the examples above it can be seen that it is beneficial to use the automated labour cost functionality when you are already using the time entries functionality.
In summary, the benefits of automating the labour costs, would be that you are removing the additional admin and preventing any “finger faults” when capturing the labour costs.
If this functionality has not been implemented on your instance, simply log a support call and the support team will gladly assist you with automating your labour cost.