Costpoint uses labor categories to classify labor hours for reporting and to provide project-specific job titles for which labor hours can be billed and used in revenue calculations. The focus of this topic is Project Labor Categories (PLCs). This topic contains information on how to select the appropriate method of PLC initialization, how to process labor hours for use in revenue and billing calculations, how to use labor reports, how to understand PLC validation, and how to evaluate options available for PLC defaulting on timesheets.
Costpoint has two types of labor categories: General Labor Categories (GLCs) and Project Labor Categories (PLCs). They are used in the following manner:
General Labor Category (GLCs) (otherwise known as the company classification) are used to classify employee hours. A GLC is a required entry for all labor transactions and is used for all employees regardless whether they are incurred for direct or indirect hours. GLCs cannot be used with labor rates for billing and revenue. Most labor reports are available by GLC.
Project Labor Categories (PLCs) are used to identify a labor title that is used on a particular project. The PLC is then assigned a labor rate and is used in billing and revenue calculations. There are several methods available for using PLCs. Only PLCs can have labor rates associated with them.
GLCs can be defaulted on each timesheet line and are stored with the hours charged against them. You must assign a GLC to all employees on the Manage Employee Information screen. GLCs are required for all labor transactions and are stored on the Manage Project Labor History screen and the timesheet history screens in Costpoint Labor. You can use GLCs for reporting in the Projects, Human Resources, and Labor modules.
PLCs are optional and are usually used when the project is using Loaded Labor or Multiplier revenue and billing methods. You must associate labor rates with the PLCs if you are using PLCs in revenue and billing computations. You can also use PLCs to customize job titles for projects when the GLC description is not specific enough or when an employee’s job title changes on specific projects. The PLC, if set up properly, also defaults onto each timesheet line and is stored with the hours charged against it.
In order to use PLCs effectively on your project, you should identify the need for labor categories on your project before any labor is charged to the project. You need to use PLCs on your project if you are using an hours-based (loaded labor) revenue or billing formula or if you use hours-based multiplier formulas for revenue or billing. Hours-based formulas are those that use hours incurred times a labor rate to derive revenue or produce a bill. Often the type of bill that is required by the client is identified in the contract.
Once you have determined that PLCs are needed for your project you must evaluate the following options:
Project Level — At which level of the project should I set up my PLC rate tables?
Rate Method — Does my project require project-specific job titles and billing rates, or can I use the company-wide labor rates?
Labor Rates and Rate Types — What labor rates do I need for my project, and are any special calculations required?
Manage Rate Sequence Orders screen (or the Def Rate Seq subtask of the Manage Project User Flow) — In which tables do the labor rates exist for my project?
The level of the project where labor rates tables should be set up could be a “summary level project” if rates can be used across several projects or the level of the project at which labor is charged or the transaction level. If you have selected the Top Level Workforce check box on the Manage Project User Flow, you should set up the labor rates at the top level of the project. You must also enter the top level of the project when initializing the following screens:
Assign PLC to Employee Work Force subtask of the Manage Employee Work Force screen
Assign PLC to Vendor Work Force subtask of the Manage Vendor Work Force screen
You can use a source project for your labor rates if the labor categories and billing rates that you need for your project are already being used on another project. You can set this up on the Manage Rate Sequence Orders screen. Costpoint automatically substitutes the source project for the transaction project during PLC validation and defaulting and during the Load Labor Rates process. If you decide to use this method, enter the transaction level of the project in the Project field and enter the source project in the Source Project field on the Manage Rate Sequence Orders screen. The source project is the project for which labor rates have been established and for which you want to use these rates.
Three rate methods are available for initializing project PLCs and labor rates. The method selected determines how PLCs are validated during transaction entry. For example, if you select the project-specific PLCs, only those PLCs that have been assigned to the project are valid for the project during transaction entry .
The method selected for a particular project depends on how specific the labor description and billing rates need to be for that project. In some cases, a company-wide billing rate and PLC description works, and in others a more project-specific rate is necessary. The PLC rate method is selected on a project-by-project basis. There is no need to have one method for all projects.
The rate methods are as follows:
Company-wide labor categories and billing rates — Use company-wide PLCs if billing rates and labor descriptions do not vary from project to project. You can use company-wide billing rates for most projects and use other rate methods for projects that require more specific descriptions and billing rates. Use the Manage Project Labor Categories (PLC) screen to enter the PLC and related description. You must first enter all PLCs in this screen regardless of the rate method that you select. Only PLCs entered in this screen are valid for the project-specific screens that follow. If you select company-wide billing rates, use the Billing Rates subtask of the Manage Project Labor Categories (PLC) screen to enter billing rates. Company-wide PLCs are the easiest to initialize and maintain. If you are using a PLC discount method, you can set up the discount percent in this screen.
Project-specific PLCs — Use project-specific PLCs if there are specific PLCs that are required for the project. Use the Link Project Labor Categories to Projects screen to create a set of PLCs that are valid for the project. After you select this method, only those PLCs that are assigned to the project are valid. The transaction entry screens use the PLCs on the Link Project Labor Categories to Projects screen to validate the project/PLC combination entered. You must first enter PLCs on the Link Project Labor Categories to Projects screen if you plan to use a project work force for your project. Use the Link Project Labor Category Rates to Projects screen to enter the billing rates associated with the project-specific PLCs. You may have specific labor category titles required for your project. You can customize the PLC descriptions in this screen. This rate method requires more maintenance than the company-wide PLCs method. If the Source Project on the Manage Rate Sequence Orders screen is using a discount method of PLC Discounts, you can enter the discount percent in this screen.
Project Work Force — Use this method if you have specific PLCs and employees, vendors, or vendor employees that are required on a project or you want to have a PLC default by employee on the timesheet for this project. This method requires the most maintenance of all the rate methods. Initialize this method in the following screens
Manage Employee Work Force (and the Assign PLC to Employee Work Force subtask), Manage Vendor Work Force (and the Assign PLC to Vendor Work Force subtask), and the Manage Vendor Employee Workforce (and the Assign PLC to Vendor Employee Work Force subtask) screens. Use the Manage Employee Work Force, Manage Vendor Work Force, and Manage Vendor Employee Workforce screens to select the employees, vendors, and vendor employees that are valid for this project. If you select the Project Workforce Required check box on the Basic Info tab of the Manage Project User Flow, only the employees/vendors/vendor employees in these screens are valid for the project. If you do not select the Project Workforce Required check box, there is no validation of employees, vendors, or vendor employees. However, if you want to use the work force for PLC defaulting, you must identify the employees, vendors, and vendor employees for this project. Use the Assign PLC to Employee Work Force subtask of the Manage Employee Work Force screen, Assign PLC to Vendor Work Force subtask of the Manage Vendor Work Force screen, or the Assign PLC to Vendor Employee Work Force subtask of the Manage Vendor Employee Work Force screen to assign PLCs to the employees, vendors, or vendor employees in the work force. You can assign multiple PLCs to an employee, vendor, or a vendor employee, but only one PLC can be the default for that employee, vendor, or vendor employee. Labor rates are assigned for the work force on the Link PLC Rates to Employee/Vendor screen. This method prevents charging of employees and PLCs that are not valid for the project. If the Source Project on the Manage Rate Sequence Orders screen is using a discount method of PLC Discounts, you can enter the discount percent in this screen.
Rate types are used to calculate the labor rates that are inserted into the Manage Project Labor History screen and the Manage Open Billing Detail screen. The Load Labor Rates screen calculates the billing rates based on the rate type selected for the project and PLC. The rate types available are as follows:
Actual Rate (A) — This rate is calculated by dividing the total labor cost by the hours incurred. The Post Labor Distribution process posts the labor cost and hours directly from the timesheet line for the project/account/organization/GLC/PLC to the Open Billing Detail screen and the Manage Project Labor History screen. The labor cost on the timesheet can be affected by auto-adjustment, or several labor processes including the Manage Wage Determination Rates screen, the Apply Weighted Average Rates to Timesheets screen, and the Allocate Compensated Overtime Across Timesheet Lines screen. As a result, the rate that is calculated and inserted into the Manage Project Labor History and Manage Open Billing Detail screens may not be equal to an employee's standard hourly rate. If you want the employee's standard hourly rate on the Manage Employee Salary Information screen, select the Standard rate method. This rate type is usually used for multiplier billing and revenue formulas.
Billing Rate (B) — This is the rate that is entered into the billing rates screens. There is no further calculation to the rate entered. This is the rate type that is generally used by Time & Materials billing and revenue formulas. These rates are generally defined by the contract for the project.
Ceiling Rates (C) — This is the lower of the Actual Rate or a Ceiling Rate entered in billing rate screen. Costpoint first calculates the actual rate and then compares it to the rate entered in the billing rate screen and uses the lower of the two. The billing rate screen used to obtain the ceiling rate depends on the sequence on the Manage Rate Sequence Orders screen. This rate type is usually used for multiplier billing and revenue formulas.
Standard (S) — This is the standard hourly rate for the employee. This rate is derived from the employees record on the Manage Employee Salary Information screen. The Load Labor Rates screen identifies the employee for each transaction and selects the rate in the Effective Rate field in the Rates group box on the Manage Employee Salary Information screen. See the screen documentation for this field to obtain more information on how the Effective Rate field is calculated. This rate type is only for employees and should not be used when entering vendor or subcontractor labor. This rate type is usually used for multiplier billing and revenue formulas.
Transactional (T) — This rate is used by projects that bill using foreign currencies. To use this rate type, enter the labor rate that you want to use in the currency in which you want to bill. If you use the T rate type, no conversion is used for those labor rates. The rate entered in the billing rates screens is used on the bills. If you bill in foreign currencies and you do not use T rates, exchange rates are applied to the labor rates during the Load Labor Rates process.
Use the Manage Rate Sequence Orders screen for PLC validation and for the selection of labor rates for billing and revenue. Costpoint uses the following methods to perform these tasks:
PLC Validation — Costpoint validates PLCs based on the Source Project on the Manage Rate Sequence Orders screen. The project entered in the Project field is the transaction project or the project that is entered in the transaction screen. It must be the transaction level of the project or the top-level project if the Use Top Level Work Force check box is selected on the Basic Info tab of the Manage Project User Flow. The source project is the project that Costpoint uses to validate the PLC used with the transaction project in the transaction entry screen. Costpoint substitutes the source project for the transaction project when performing PLC validations. The transaction project and the source project are very often the same project number. Use a source project that is different from the transaction project if you have an existing project that has the same PLC and labor rate requirements as the project that you are initializing. You must set up a record on the Manage Rate Sequence Orders screen for all projects that use PLCs.
Labor Rate Selection — The Load Labor Rates screen uses the source project, PLC, sequence number, and effective date range on the Manage Rate Sequence Orders screen to select the labor rates to be inserted into the Open Billing Detail and Labor History tables. The Source Project on the Manage Rate Sequence Orders screen is used to select labor rates. Very often the transaction project and the source project are the same, but when they are not the same, the source project is used. Since project labor rates can be set up in several screens, you must establish a sequence of screens that the Load Labor Rates process uses for selecting labor rates. The labor rate selected must also have an effective date range that includes the effective date on the Manage Project Labor History screen and the Manage Open Billing Detail screen. The Manage Rate Sequence Orders screen contains codes that refer to the screen in which labor rates are located for that project. Select the code of the first screen from which you want to select labor rates. This screen must be assigned a Sequence number of 1. The next screen from which you want to select labor rates must be assigned a Sequence number of 2, and so forth. The Load Labor Rates process continues through all the sequences on the Manage Rate Sequence Orders screen until one is found for the PLC and effective date range. If no matches are found, no rate is inserted into the billing and revenue tables. The Costpoint-defined rate table codes are as follows:
C (Set up Project Labor Categories) — These labor rates are on the Billing Rates subtask of the Manage Project Labor Categories (PLC) screen. They are the company-wide rates.
PC (Project PLC Rates) — These labor rates are on the Link Project Labor Category Rates to Projects screen and are considered project-specific labor rates.
PEC (Project PLC Rates by Employee) — These labor rates are set up in the Link Project Labor Category Rates to Employee/Vendor screen. These labor rates are those that are associated with the project work force.
PVC (Project PLC Rates by Employee/Vendor) — These labor rates are set up in the Link Project Labor Category Rates to Employee/Vendor screen. These labor rates are those that are associated with the project work force.