Recalculate standard cost [in-depth guide]
Guide contents: How it works | Example
This feature is designed to normalize the time entries of salary employees. This requires the employee records to be set up with a 'monthly cost' amount that is used to recalculate the hourly cost on each of their time entries. This process must be run manually after all time entries for the month have been entered before running this process in the client/project Multi-view reports.
For example, if a monthly employee entered more hours in one month, then the hourly cost of each time entry during that month would be lower so that the sum total of those hourly costs equals the monthly cost value for that employee.
NOTES:
- Do this only after all time entries have been entered for the prior month.
- Employee records with a zero monthly cost will be ignored in this process.
How it works
1. From any of the following reports, you can run this recalculation:
2. In the report's upper right corner, click More. This will show the option to Recalculate standard cost.
3. Clicking this option will then show a prompt with the 'year' and 'month' fields to recalculate.
4. Now, all hourly costs of time entries for employees with a monthly cost are normalized to match.
Example
Before pressing the Recalculate standard cost, you have the following:
- A $5000 JE for payroll.
- An employee record with a 'monthly cost' of $5000.
- That employee's time entries for the month have a total hourly cost of $4000, based on their hourly cost in their employee record.
- The profit & loss report will show $4000 of inside cost and $1000 of overhead allocation.
After pressing the Recalculate standard cost, you have the following:
- A $5000 JE for payroll.
- The hourly cost of the employee's time entries for the month recalculated are now normalized.
- The total for all those time entries now equals the 'monthly cost' of $5000 set in the employee record.
- The profit & loss report will now show $5000 of inside cost and zero overhead allocation.