Job Costing Benefits

creating efficiency and preventing budget issues

Tracking Individual Tasks For Job Costing

You probably already know the importance of tracking precise time worked on the job. Not only do you verify how your employees are spending their time, but you save money in the long run. That said, what are the benefits of taking time tracking further, and tracking individual tasks worked?

Job costing allows you to track these tasks by classifying them as separate entities. For instance, an employee might clock into “Electrician” as their job, but may need to denote “Light fixture Installation,” “Outlet replacement,” or “Fuse repair” as their task.

Material Costs

For every task that can be performed, the overhead must be assessed. This can comprise the initial overhead, the costs of necessary materials, and even fuel expenditures.

Direct and Indirect Costs Consequently, you may have to allocate amount of money for each task. You will want to make sure that no more time than necessary is worked in a certain task, or you may find your organization quickly over budget.

TimeClock Plus job costing is specifically designed to prevent these issues before they occur. Employees can switch between tasks as needed, and supervisors and accounting can set budgeted hours or money and monitor task usage. This not only benefits your organization’s bottom line, but also can help save customers’ money as well.

Breakdown

Tasks typically stem from larger needs. For instance, an automotive repair facility may break down its cost codes by vehicle manufacturer (e.g. Ford, Chevrolet, Dodge). Beneath this, there may be a breakdown of vehicle model (e.g. Mustang, Camaro, Ram) and model year (e.g. 1999, 2015). Even further down, there may be a breakdown of what is being repaired (e.g. brakes, transmission, radiator) and how it is being repaired (e.g. pad replacement, fluid change, coolant fill).

With this in mind, let’s say that a mechanic named Ron needs to replace some brake pads in a 1967 Mercury Cougar. He clocks into his Mechanic job, then chooses his task—his cost code—by breaking down what needs to be done:

Job Costing Breakdown for 1967 Mercury Cougar Brake Pads This type of specific breakdown is helpful for not only determining how Ron spent his time, but also for determining the costs associated with a maintenance job on a classic vehicle, including possible parts fees.

However, these breakdowns aren’t required to be as detailed as Ron’s – it’s perfectly acceptable to use tasks that are less detailed, depending on your needs.

For instance, Mary works at a soda bottling plant. Each day, she works on an assembly line, and depending on her daily schedule, can work on the assembly line for cola, lemon-lime, root beer, or ginger ale. She clocks into her Line Worker job, then chooses the following cost code:

In this case, a further breakdown isn’t necessary, as the soda plant only needs to track Mary’s movements from individual product to product.

Regardless of how detailed your job costing is, tracking a task breakdown makes a difference by ensuring employees are where they need to be, while also making sure that costs are allocated correctly.

Importing Cost Codes

Importing Cost Codes As you can imagine, it can be very easy to accumulate a bunch of cost codes. Depending on your needs, you could very well have cost codes numbering in the hundreds or thousands.

If that’s the case, then it’s reasonable to assume that neither you nor your staff will want to manually enter each individual cost code and its settings. Doing so would accrue far too many hours of dreary configuration work.

To save you time during initial setup, you can import either a fixed length or delimited (CSV) ASCII text file that includes all the cost codes and their attributes (e.g. a description, activation status, billed hours and dollars, and so forth). Importing reduces a potential multi-hour operation to mere seconds or minutes, thus saving you time, money, and sanity.

Viewing and Modifying Cost Codes

Job Cost List Once your cost codes are saved in the system, there are several options at your disposal for viewing them individually.

The Cost Code Simple Select allows you to locate a cost code by using editable dropdown menus to navigate its levels. The Cost Code List is a flat list of cost codes. The Cost Code Tree breaks down the levels into a tree view. In addition, any of these views can locate a cost code via a search bar.

Modifying a cost code is as easy as locating it in a list and changing its attributes. If you need to modify multiple cost codes at once—for instance, if a branch is decommissioned—then you can do so by either using the Manage Branch tool, or by re-importing the cost codes with their attributes changed.

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Cost Code Groups

It stands to reason that not every employee may require access to all cost codes in a list—for instance, a carpenter may not work on a masonry job, or vice versa—so you can group cost codes together and assign the groups to jobs and employees as needed.

Cost Code Groups Grouping cost codes is as easy as setting rules for how the cost codes should be grouped. Rules can be set per each cost code level, filtering out any cost codes that don’t match the set criteria.

If employees have one group assigned, but their job codes have another assigned, then you can set how these groups interact, and which cost codes employees will have access to. If using an “Intersection” view, then employees will only see cost codes that are in both groups, and any codes that are not in both are filtered out. Alternatively, if using a “Union” view, then employees will have access to all cost codes in both groups.

Employee Usage

Naturally, employees won’t always work a single task during the day, and may need to change tasks. This is very easily done depending on how your system is set up.

Changing Job Costing For instance, suppose Mary from the example above switches over to the root beer line after working in the cola line for two hours. She will go to her terminal, choose the option to change cost codes, select “Root Beer” from the list, and confirm the operation as needed.

For organizations using labor codes (see below), employees will choose multiple cost codes at once, normally during a Clock In operation. On occasion, employees may even need to change labor codes at some point during the day, and choose a new or modified list of cost codes.

Reporting

Fortunately, tracking these details is a breeze. A Cost Code Budget report can show you both the budget for cost codes, the amount of cumulative time worked in each cost code, and any relevant variances between the two. In addition, it can subtotal different cost code levels, so if you need to see a broad breakdown, you can do so.

Cost Code Summary In a broader sense, either a Cost Code Summary or Cost Code Summary by Employee report can show you the hours worked in each cost code—in the case of the former, cumulatively for all employees you have access to, and for the latter, by each employee individually—so that you can see how the time is individually distributed.

But let’s say that there’s a specific task that needs attention, and you need to examine the total hours spent in one cost code. A Period Individual Cost report will show you a breakdown of how much time was spent on a single task, including any overtime hours, and which employees used time in that cost code. Plus, you can see a per-week breakdown or a generalized summary of the total hours in the specified period, depending on the type of Period Individual Cost report you use.

If there is a frequent need for any of these types of reports—for instance, if you need to keep an eye to make sure that tasks do not go over budget—you can set up an automation to email copies of these reports to managers and payroll at the end of every work day, work week, or period.

Exporting

Matching cost code data to your payroll system further keeps your figures balanced in the long run.

Export Cost Code Data To Payroll When setting up your system, you can match your cost codes to their counterparts in your payroll software by using custom fields. These fields allow you to set the values that your payroll software can recognize.

When it comes time to process payroll, a period export can be run for a certain date range—usually one that corresponds to your pay period—converting your hour data into a file with the information your payroll software can effortlessly process.

Once imported into your payroll software, depending on how your payroll runs, you can check cost code usage and calculate costs accordingly.

Labor Codes

Individual cost codes are the tip of the iceberg. If time must be evenly distributed to multiple cost codes, then labor codes can allow that to happen.

Basically, a labor code is a group of cost codes that the employee can choose upon clocking in. This allows employees to use multiple in cases where an employee might not have the ability to change codes rapidly.

Labor Codes With labor codes enabled, employees can clock into their job codes normally, then choose each cost code they will work during the shift. For example, Bill does quality control at a medical manufacturing factory, and at any given moment may be examining bandages, gauze, thermometers, or syringes. Since his tasks rapidly change from moment to moment, it would take time to go to a terminal and change his cost codes. At the beginning of his shift, during his Clock In operation, Bill collectively chooses the cost codes for bandages, gauze, thermometers, and syringes.

At the end of the day, depending on how labor codes are set up, each cost code chosen will receive all the hours worked in a shift, or will receive an equal portion of the total hours worked.

Suppose Bill works an eight-hour shift, and chooses his four cost codes at the beginning of the shift. All four cost codes can receive the full eight hours, or each of the four can receive an equal slice of this shift’s hours (i.e. two hours each).

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It's easy to use; I love that I can easily check to see when I clocked in or out, and that I can see how many hours I've worked over the course of the week.

Service Quality & Operations Manager

Broadway Cab