Work Task Labor Cost

  • 8 November 2021
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ctaylor56
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Currently I have a customer using Work Task Clocking in IFS to report their time in mWO Service 10.  They have 3 main resource groups with 3 different costs. See below arbitrary example:  

Level 1: $50/hr

Level 2: $70/hr

Level 3: $100/hr

 

A Level 3 technician will belong to all three resource groups (i.e. a Level 3 can do the work of a level 3, level 2 and level 1) and a level 2 technician will belong the level 2 group and level 1 group and the level 1 technicians will only belong to the level 1 resource group.  

 

If a PM action is built with a resource demand of a level 1, essentially any resource should be able to complete the work. The planned cost would be show a planned labor cost of $50 * Work Task Duration.

 

Now if the actual tech with a primary resource group (Default Resource Group) of Level 3, then my firm belief is the Actual Cost of the Labor Work Task should be $100 * Actual time spent on the job.  

 

IFS, in this scenario is using the planned resource group cost, and completely ignoring the resource group of who is doing the work.  Which makes zero sense to me.  With IFS behaving this way, it books the incorrect cost to the balance sheet and your Margins are completely off.  

 

Trying to get others to weigh-in on this and start a conversation.  Do you all agree with me?  Glad to hear both sides of this conversation.

Don't Count the Days, Make the Days Count
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4 replies

Thommy
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Hi,

If you want this behavior (getting the cost of $100 for a level 3 resource, regardless of what level of work the tech performs) then you need to set the system up to handle this.

There is a Standard Cost in HR that are to be used in this particular case.

First you need to set up the system to ‘Use Employee Labor Cost’ in Company Details.

Then set up the Standard Cost like this:

Tech Level 1: $50/hr

Tech Level 2: $70/hr

Tech Level 3: $100/hr

Observe that this is not the resource groups but an attribute associated with each employee.

This will give the following behavior:

  • The resource group setup will be used purely for scheduling of resources.
  • The cost will be catered for by the standard cost setup 

I have attached some screenshots illustrating the setup.

Finally a comment fetching $100 for a level 3 resource, regardless of what level of work the tech performs - this would be a problem if you are using cost-based setup when invoicing the work to a customer. Why would I as a customer except to pay $100 (± my extras/discount) for a work that requires a resource that would cost $50 (± my extras/discount)?

Above illustrates that there are multiple scenarios that needs to be handled in a correct way when it comes to costing of resources.

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ThommySjolander
ctaylor56
Rank
Userlevel 5
Badge +14

Hi,

If you want this behavior (getting the cost of $100 for a level 3 resource, regardless of what level of work the tech performs) then you need to set the system up to handle this.

There is a Standard Cost in HR that are to be used in this particular case.

First you need to set up the system to ‘Use Employee Labor Cost’ in Company Details.

Then set up the Standard Cost like this:

Tech Level 1: $50/hr

Tech Level 2: $70/hr

Tech Level 3: $100/hr

Observe that this is not the resource groups but an attribute associated with each employee.

This will give the following behavior:

  • The resource group setup will be used purely for scheduling of resources.
  • The cost will be catered for by the standard cost setup 

I have attached some screenshots illustrating the setup.

Finally a comment fetching $100 for a level 3 resource, regardless of what level of work the tech performs - this would be a problem if you are using cost-based setup when invoicing the work to a customer. Why would I as a customer except to pay $100 (± my extras/discount) for a work that requires a resource that would cost $50 (± my extras/discount)?

Above illustrates that there are multiple scenarios that needs to be handled in a correct way when it comes to costing of resources.

Thanks @Thommy for your response, I was reading the IFS documentation and the HR standard Cost said it was for use only in the IFS/Project Reporting Component:

 

System Effects

The standard hourly rate is used in the IFS/Project Reporting component.

 

But I will try it for IFS/Maintenance and follow-up with you.

 

In regards to cost to the customer, the external customer is not billed more for the higher resource but the true margin of the job is lower.  Obviously we want to avoid this when necessary, but truth of the matter is it does and will happen and we want to ensure our costs and margin reports are accurate.

Don't Count the Days, Make the Days Count
ctaylor56
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I was able to test the standard cost solution and this worked for IFS Maintenance Component.  Thank you @Thommy!

Don't Count the Days, Make the Days Count
Thommy
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Happy to help out @ctaylor56 

Unfortunately the documentation isn’t 100% it seems.

But the priority of fetching the cost should be:

  1. HR (first from Salary and if not set up, from Standard Cost)
  2. Resource Group
  3. Maint Org
ThommySjolander
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