Paying Your Employees Based On Billable Hours

Transcription

1 Paying Your Employees Based On Billable Hours INTRODUCTION You can pay employees based on billable hours, rather than actual hours, using the task duration (or standard hours) for each task in the pricebook. When you record a customer invoice using a task item, the system records the task duration. You will run reports to total the billable hours later. SETUP AND PROCESSING You must enter the correct duration on each task in your pricebook. The system uses the task duration to report billable hours on the task. To enter standard hours on a task: 1. Open the PRICEBOOK by selecting the pricebook icon on the toolbar, or you can select Purchasing then Pricebook from the MAIN MENU. 2. Click on the + sign to the left of the category that contains the item you wish to edit. That will display the groups within the category. 3. Highlight the group that contains the items you wish to edit. The grid in the right panel of the screen will display the items that are in the group. 4. Highlight the item you wish to edit and press Enter, or right-click to select Edit task item. You can also double-click the item to open it in edit mode. 5. Enter the number of minutes to use for the task duration and save the changes. In our example we are using 285 minutes for 4.75 billable hours.

2 Note: Your task items should already include the task duration if your task prices are calculated based on pricing formulas. To record standard hours for an employee: You will record the standard hours for each task as you add tasks to the customer invoice. You can edit the standard hours for a particular task, if necessary, during data entry. To edit the standard hours: 1. Press Ctrl+S or right-click and select Standard hours after you have saved the line item that contains the task. 2. The system will display the Standard hours based on the task duration. 3. Enter the new number of hours and press Enter to accept the change. To report standard hours: The Sales Invoice Items report includes the print option Include Hrs/PLM breakdown/margin. Use that option to report standard hours that were recorded during invoicing. You will use different sorting and grouping options on the report based on how you wish to enter the earnings in Miscellaneous Wages. For instance, if you want to enter the earnings as a flat amount for the payroll period per employee, group the report by Tech. The Std Hours column reports the standard hours per task. If any changes were made to standard hours, the changes will be highlighted and included in the Revised Std column. If there are changes, refer to the revised standard total for accurate billable hours. Multiply the number of billable hours by the employee s hourly rate to determine the rate you will enter in Miscellaneous Wages.

3 If you want to enter items for totals by department you can group by Tech, then by Department. If you pay the employee different rates for different job/call types you will group by Tech, then by Job/call type. An example of that report follows:

4 In this example assume that the employee earns $18.00 per hour for AC calls and $20.00 per hour for ACLK calls. You will make 2 miscellaneous wage entries: $54.00 for AC calls (3 x 18.00), and $20.00 for ACLK calls (.75 x 20.00) Or, you may want to make a separate entry for each date (group by tech, then by invoice date) or for each department for each date (group by tech, then by date, then by department.) Try different grouping options to get the results you need. To pay overtime: You must manually calculate and enter overtime for employees that are paid based on billable hours. The number of hours to which an overtime premium should be applied is determined by hours worked rather than billable hours. Our sample employee has paid hours on his timecard. However, 4 of the hours are vacation hours and do not count toward overtime calculations (they are non-regular hours.) The sample employee has billable hours. Three of the hours are paid at a rate of $18.00 and hours are at $ In addition, he worked 16 hours in the shop. The shop time is included on his timecard so we will enter his earnings in Miscellaneous Wages but not additional hours. All earnings will be entered in the MISCELLANEOUS WAGE MANAGER.

5 After entering the employee s earnings, run the Wage Source Report to find his calculated regular rate and Premium Base. (Regular Earnings/Regular Hours) Since our sample employee worked regular hours he should be entitled to 2.25 hours of overtime. Calculate the employee s overtime earnings based on your selections for Base Rate and Premium Addition in Payroll Setup. As an example we will calculate the sample employee s overtime earnings based on his standard rate as his base rate and the calculated average for a premium addition. Since the employee s standard rate (from employee setup) is $20.00 the calculation is: ($ ) x 2.25 = You will then enter the overtime earnings in the MISCELLANEOUS WAGE MANAGER using a piece rate pay item that is not marked RegOT.

6 After entering the overtime earnings verify the employee.