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Labor rates and Account groups for projects

  • 9 March 2022
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Hi guys,

I have some difficulties understanding account groups and labor rates. Could anyone please help to explain my thoughts below? Thanks!

  1. For account groups, I couldn’t really get why it’s necessary. To track the cost of a project task, if I could appoint an expense account directly to it, why do I have to configure an account group for this expense account?
  2. As for labor rates, suppose that we have an employee who receives a fixed ammount of salary, 500 dollars every month. But we still need her to clock the time card for the projects she’s working on, so that we could bill our customer based on the hours. How should we set the labor rates then?
  3. I’m also worried about the impact on our accounting book. Since there’s a link between the non-stock item of labor type and this employee’s time card, and the non-stock item has a certain expense account, will it affect the balance of the expense account in the accounting book on release of the time card? Furthermore, if the employee’s time card is not billable, will it make any difference?
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Best answer by Laura02 9 March 2022, 14:31

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Hello @shuang57,

  1. Account Groups identify which accounts on the COA can be connected to projects and will require a project and task when used in a transaction. Account group causes the system to never allow a project in some accounts and to always require a project in other accounts.Account groups also allow for easy grouping/subtotaling by type of account on reports, similar to the way Account Classes group accounts on the Balance Sheet & Income STatement.
  2. Acumatica has labor cost rates and labor revenue rates. There are multiple ways to set up each. For example exact labor transactions could come from the Payroll module or your Payroll ISV, or you could record payroll cost to the project using estimated labor cost rates. I recommend you work with your partner or CPA and she will guide you to the best way your labor should be set up, to correctly capture both costs and revenues.
  3. I suggest you and your partner create a test environment and test through setting up your projects so you can see the impact on the test GL. Post transactions, including timecards and AP Bills, etc., to your projects and then process project billing.  Look at the transactions that posted to GL after releasing timecard and after releasing Invoices. Adjust your settings as needed to record a proper bill and proper costs in GL.   If your employee’s time is not billable then $0 revenue is on the customer’s bill, but the cost of labor will still post if you’ve configured everything properly.

Laura

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