"Billable" Labor rates in Job Cost

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Management would like to see our job cost transactions show payroll as a set $ amount per hour as agreed upon by each project owner. These set rates would vary between project. For example, project X would have a billable labor rate for Project Manager of $90 / Hour, project Z would have a billable labor rate for the Project Manager of $100 / Hour. The amounts charged to job cost would be based on the cost code the payroll hours are charged to, ie Project Manager, Project Engineer, Project Superintendent, Safety Manager, Estimating, Project Administrative. The amounts charged would to job cost would not reflect actual payroll or burden amounts.

Currently, i use ODBC to download the job cost transactions to excel, then use a formula to overwrite the amount by taking the units charged to that particular cost code x the billable rate. However, our management would like the cost details reflected in our job cost budget (we use Procore, the job cost transactions sync up). Any advice or guidance would be greatly appreciated.

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  • +1
    verified answer

    GAAP does not allow you to mix cost and labor profit, so whatever you do, you need to reverse it somehow to not show on your WIP schedule. I am not sure of your current set up but this is what I found to do the trick. I use ODBC to pull the NEW payroll file hrs/batches before it is posted in job cost and have "AR Customer" rates linked to jobs/cost codes. The rate gets multiplied by the hrs and the result will be your billable amount per job & cost code. The billable amount gets compared to the actual cost from the payroll batch (L and Burden) and the differences noted in a separate column (billable - cost). Next step is to post this under each cost code/job. I created a separate category "LD" (labor diferential) and a "fictitious" cost code # 99999. You would import the difference under cost code PManager\LD and reverse it under 99999\LD each pay period. You would need to then modify your reports to omit the 99999 cost code whenever necessary. This has no effect on the WIP and I believe 99999 can be part of your Procore integration to not get pulled in your budgets. My budgets reside in Sage and Procore is more of an electronic storage to me. Hope this helps.

  • 0 in reply to Angel Goldman

    Thank you Angel, i forgot to mention the contra cost code that would capture the payroll/burden delta, funny i was actually thinking of using 99999. Thank you for sharing your process with me, very helpful.

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