Job Enhanced Overhead for Job Manager

Transcription

1 Job Enhanced Overhead for Job Manager Objective: This optional Granule is designed to make automatic Job Ledger Entries for Overhead that is preassigned to Items, Resources, or General Ledger Accounts. Here is the definition from Dictionary.com noun 1. the general, fixed cost of running a business, as rent, lighting, and heating expenses, which cannot be charged or attributed to a specific product or part of the work operation. 2. Accounting. That part of manufacturing costs for which cost per unit produced is not readily assignable. Results of using this granule with Jobs: In the normal processing of expenses you receive payable invoices for expenses that are not Job specific costs. You process them without job numbers. However, you wish to post some additional costs to jobs that that simulates the overhead cost based on some formulas. Typical examples of overhead formulas are a percentage of the other actual labor and material costs. As you post Actual Cost in or through the Job Journal, Purchase Order, Purchase Invoice, and Time journal the Overhead Granule will add an additional overhead cost entry based on the pre-defined and desired additional Percentage or Fixed Amount in the setup of the Overhead Rate Tables. We support: 1. Manually Entered Costs in the Job Journal. (i.e.: Labor, Materials, or GL Amounts) 2. Purchase Order Cost that flow through the Job Journal to the Job Ledger Entries 3. Purchase Invoice Costs that flow through the Job Journal to the Job Ledger Entries. 4. Time Journal Entries from the Payroll Add-on that flow through the Job Journal. 5. Estimating the overhead per task or per job during the estimate process. z:\click here for manuals\job enhanced overhead for job manager 50sp1.doc Page 1

2 OUTLINE OF GRANULE FUNCTIONALITY: I. Overhead entries for your Job Estimate A. Always creates one Overhead entry per planning line. B. Overhead setup allows overhead entry to be sent to one overhead task or C. Overhead entries are sent to the parent line s task. D. Editing the parent planning line cost will edit the cost on the linked overhead entry E. Setup for Estimate Overhead F. Running the Create overhead entries process. II. Overhead entries for actual cost A. Automatic overhead entries when actual cost transaction is posted to the Job ledger 1.) Job Usage Journal entries can have per entry overhead calculated and inserted into the usage journal before posting. This is good for testing your overhead setups. The Function is on the job journal and is optional. 2.) Or just let the system create the overhead entries as the parent transaction is posted. B. Periodic overhead transaction it summarizes the overhead amounts by the overhead Type, No. and Job No. associated with the transaction (based on the overhead setup) then creates entries in the Job usage journal to be reviewed and/or posted. 1.) Automatically post the overhead entries or 2.) You can control if the entries will stop in the Job Usage Journal before posting at which time you can: a.) Edit the entries in the journal before they post b.) Or if you delete an overhead entry the system will delete all the entries within the same posting date range on the journal line. C. Setup for Actual Overhead Example of periodic overhead calculations: z:\click here for manuals\job enhanced overhead for job manager 50sp1.doc Page 2

3 You will see below the Setup and Workflow to make this process work to your configuration. z:\click here for manuals\job enhanced overhead for job manager 50sp1.doc Page 3

4 Setup: There is a new Overhead Setup menu item on the Setup option of the Jobs Main Menu. This new menu item will open the Overhead Setup form. The overhead form has a button Overhead that gives you access to setting up the overhead calculation parameters for Items, Resources, and G/L Accounts. The Overhead Button is where you access setting up the overhead calculation parameters. The setup forms for Resource Overhead and G/L Overhead are almost identical to the Item Overhead shown below. The same process will be used to set them up. For this example we are using the Item Overhead Setup. z:\click here for manuals\job enhanced overhead for job manager 50sp1.doc Page 4

5 The Item Overhead tables look like this: First you will need to decide if you are creating an overhead cost based on: 1. A specific Item 2. An Item Category 3. All Items Next you will choose which Item or Item Category. After this you will need to specify if this is for a specific job or not. Next is the Starting and Ending Date for this overhead. Once you have done all that you will now need to set up what you are applying the overhead to. This can either be a Resource or G/L Account. Whichever option you choose you will need to make sure that it has a Cost Category of Overhead. This is to insure that the costs will be broken down accurately by the system and displayed in the correct locations in Job Statistics and Task Details. The Overhead Method will either be by Percentage or Fixed Amount. Specify the Amount. Optionally you can establish Min. Amounts and/or Max. Amounts to each line. Next: Setup an OH Type of resource. z:\click here for manuals\job enhanced overhead for job manager 50sp1.doc Page 5

6 Go to Jobs, Resources, Overhead Resources, F3 (insert) and enter something like the following. Be sure to make this a Cost Category of Overhead. It is also important that there be NO pricing information for this Resource or G/L Account. If you need the overhead cost entries to have a price, then you will need to use the Job Pricing tables. You will find that setup on the Job Card, Prices Button. Once you have chosen what you are applying as the overhead you will need to determine if you want a Fixed or Percentage based overhead. If you chose a percentage based overhead then the amount will be the percent of the total usage cost when the overhead is calculated. We have also given you an option to set a minimum and maximum overhead amount for the line. If setting up an OH Type of G/L Account: Be sure the Cost Category for the account is OVERHEAD. z:\click here for manuals\job enhanced overhead for job manager 50sp1.doc Page 6

7 Overhead Setup Estimating Tab: This is where you setup how the overhead costs will be placed in the Job Estimate. Overhead Allocation Type field By Job This is used when you have a designated Overhead task for each Job. This designated task is where the overhead planning lines will be inserted. You will need to designate an Overhead task that is common among all Jobs you create. For instance, is the overhead task is 1200 then all jobs that will have overhead calculated will need the 1200 task code. And the 1200 task code must be a Task type of posting. Tasks other then 1200 will not have overhead planning lines. See the Design task below: z:\click here for manuals\job enhanced overhead for job manager 50sp1.doc Page 7

8 Task 1200 has all the overhead lines. Overhead Est Task field is where you enter the By Job designated Overhead Task No. z:\click here for manuals\job enhanced overhead for job manager 50sp1.doc Page 8

9 Overhead Setup - Estimating Overhead Tab continued.. By Task This option will create the planning lines below the task that they are being derived from. Examples below: Notice that the Design Task now has Overhead lines: Estimate Task as only the Overhead for Estimate costs and so forth. z:\click here for manuals\job enhanced overhead for job manager 50sp1.doc Page 9

10 Running the process to create the Estimated Overhead: There are two Overhead functions on the Job Card Functions button. Generate Est. Overhead will create the overhead planning lines. If you need to change something in the setup and re-run the function, just use the Delete Est. Overhead function, change your setup and re-run the Generate Est. Overhead. z:\click here for manuals\job enhanced overhead for job manager 50sp1.doc Page 10

11 Overhead Setup Actual Overhead Tab : This setup is for how the actual overhead costs will be calculated. If the Auto Apply Overhead is checked, this means that overhead will be calculated and posted automatically when Purchase Orders, Payroll Time Journal, and Job Journal entries are posted. There will be one overhead entry for each parent transaction. When Auto Apply Overhead is not checked, then the two Periodic Overhead fields are necessary. In this case the parent transactions are posted to the Job Ledger without overhead entries. Periodically you will run a Calculate Overhead function that will look to the Job Ledger and find lines that have not had overhead calculated. This method summaries the overhead entries and then always posts them to the designated OH Post Task. z:\click here for manuals\job enhanced overhead for job manager 50sp1.doc Page 11

12 Workflow: Assuming that you have completed the setup for overhead calculations, you are now ready to post actual costs with additional overhead cost entries. Job Journals: There are 3 ways to get overhead cost entries to Jobs from the Job Journal. 1. Go to the Job Usage Journal. Enter the actual cost posting. (Mark worked 5 hours on job J ) Then Post. If the setup for Automatic Overhead then the calculation of overhead happens during the post process and the result will be Mark s actual costs entry, plus a second entry for the overhead cost. 2. Go to the Job Usage Journal. Enter the actual cost posting. (Mark worked 5 hours on job J ) Then select the menu choice on the Functions button called Calc. Overhead. The result will be that overhead entry lines will be automatically created in the journal below the corresponding actual cost line. You may change or delete the overhead line(s) at will. However, to post this journal you need to do a lookup on the Job Journal Batch table and check column Allow Overhead Post (see below) on the particular batch you are using. When the Allow Overhead Post field is checked for a batch, overhead will NOT be z:\click here for manuals\job enhanced overhead for job manager 50sp1.doc Page 12

13 calculated during posting. This is also true if even if you have not run the Calc. Overhead but the batch is still flagged to allow overhead post. No overhead will be calculated. So be sure you are consistent about the way you use post overhead. IMPORTANT: You are allowed to use the Calc. Overhead in the Job Journal when the Overhead setup is set for Periodic posting, BUT you will not be able to post the journal with the overhead lines. You MUST delete the overhead lines before posting. The only reason for using the Calc. Overhead when doing periodic overhead posting is to check you overhead calculation parameters. There is a new field, Allow Overhead Post, in the Job Journal Batch table. If you are just using the Calc. Overhead function as a test for newly setup Overhead formulas then remove the check from the Allow Overhead Post field. And always remove the overhead lines before posting. If you run the function and want to get rid of the lines you can filter the lines on the Is Overhead field (design this column to your form) and finding the entries where that is true. These are the entries created from the Cal. Overhead Function. If overhead entries are left in the journal and your batch doesn t allow for overhead posting then you will receive an error message telling you that the line already exists. This is because the posting routine will not know that these entries are there, and will try to create them. You will either need to allow for overhead posting in this batch or remove the overhead entries. z:\click here for manuals\job enhanced overhead for job manager 50sp1.doc Page 13

14 Purchase Orders, Purchase Invoices, and Payroll Journals: The overhead calculation process is done entirely behind the scenes. When you post a Purchase Order/Invoice that contains a Job No. on the line you will generate a Job Ledger Entry for that line. With the overhead costing you will now generate a second Job Ledger Entry for any overhead you have set up in the setup tables. The new Overhead entries are inserted right below the corresponding line. Back Flush of raw materials or subassembly usage: If you post Finished Good production in the Production Journal the corresponding Raw Materials are entered in the Job Journal for review, adjustment, and posting. If automatic overhead is turned on, then the resultant entries in the Job Ledger Entries will contain both the original raw materials and the additional entry for overhead per transaction. Reporting: First there are 3 reports that show the current setup of the Overhead Calculations. Second, there is a report to print the Job Ledger Entries. This report can be used to compare to your GL s Overhead Expenses. Add Filters as desired: Master Job, Sub Job, Cost Category, and Posting Date Ranges. z:\click here for manuals\job enhanced overhead for job manager 50sp1.doc Page 14

15 We recommend that you group Direct Expenses and Indirect Expenses on your Income and Expense Statement. Seeing a total of the Indirect/Overhead Expenses will help you to make the comparison to the Overhead Allocations that have been charged to the Jobs within the same period. For an example you may look at the total of Indirect Expenses in your General Ledger for March of this year and you see a total of $50,000. You then run the Overhead Cost report for the same period (date range). If the automatic overhead cost calculated entries is $55,000. Then you know that your formulas / percentages are a little higher then the actual indirect expenses. You will need to do this comparison for several months to see if they are consistently high, low or very close. You will never be exact. Overhead and the WIP Process: You can decide if you wish to WIP these overhead costs, or not. Typically you do not. To set this option, go to Jobs menu, Setup, Advanced Setup. On the General tab you will see a field called Allow WIP Overhead. If this is checked then Overhead entries will WIP, with the same posting parameters that all other entries use. This setting must be entered before you post Overhead entries. If you turn this on after Overhead entries have been posted, the posted entries will not WIP. There is a field called chargeable on the Job Ledger entries. When this is not checked the entries will not WIP. This is the tool used to prevent Overhead entries from WIPing. Resource and Item Setup: You should not enter a value in the Indirect Cost % field on the Resource Card and Item Card when using the Overhead granule unless the Indirect Cost % represents additional costs other then overhead. Generate Estimate of Overhead You can now generate an estimate of the overhead from the Job Card. This will allow you to quote with the overhead built into your quotation. To do this select the Functions Button on the Job Card and select Generate Est. Overhead. z:\click here for manuals\job enhanced overhead for job manager 50sp1.doc Page 15

16 This function creates planning lines on the estimate worksheet that correspond with the original cost lines. You can run this process more than once if you need to, it will only generate one overhead planning line for each cost planning line you have previously created. Since the new overhead lines are linked to the parent planning line, you can adjust the parent and it will update the overhead estimate line also. A word of caution here, if you have already changed the amount on the overhead line, then any change on the parent item will overwrite your change. The best place to view the results of the new lines is on the Job Statistics (F9) Screen under the Overhead Cost Category. Additional Comments: 1. It is important to understand what the Granule will not do. It will not magically allocate or prorate business expenses such as Rent, Utilities, or Insurance to the Jobs. The jobs typically change to quickly to establish a reasonable Denominator for this calculation. The purpose of the overhead entry is to tack on to each Job Cost Entry a reasonable Percentage to act as the allocation of these Overhead Expenses. 2. As of 4/15/08 this Granule is being released. 3. We welcome your feedback and requests for enhancements. Developers: Cost Control Software Oak Road Carmel, IN (317) z:\click here for manuals\job enhanced overhead for job manager 50sp1.doc Page 16