Subject: Seeking Solutions for Labor Burden Adjustment in COGS
Hello everyone,
We’re currently using Sage Intacct and have established labor burden rates for our employees based on their expertise levels. We also incorporate Job Costing to apply these burdened labor rates, alongside other factors, to specific projects. While this process is functioning well, we’re unsure how to effectively remove the burden rate from the Income Statement to avoid double counting costs.
Ideally, we’re looking for an automated reversal function at the end of each period, rather than relying on manual journal entries. If anyone has insights or solutions—particularly those using Sage Intacct—I would greatly appreciate your input!
Thank you!
One response
It sounds like you’re doing a great job integrating labor burden rates into your job costing with Sage Intacct! To automate the reversal of the labor burden from your Income Statement at the end of the period, you might consider a couple of approaches:
Automated Journal Entries: You could create a recurring or scheduled automated journal entry that reverses the labor burden amounts at the end of each Accounting period. You can set this up within Intacct’s automatic journal entries functionality. This would allow you to specify the accounts to debit and credit and ensure that these entries are made without manual intervention.
Metrics and Custom Reporting: Utilizing Intacct’s reporting capabilities, you might create customized financial reports that exclude or adjust for the labor burden. Consider using a custom report to show the net impact of labor on job costs without presenting burdened labor as a direct expense in your Income Statement.
Account Mapping: Review your account mapping to determine if there’s a way to separate burdened labor from direct payroll costs at the time of posting. By creating a distinct account structure that allows you to record burdened labor in a different category temporarily, you can streamline the process during period-end closing.
Automation Workflow: If your team has familiarity with Intacct’s API, you could potentially set up a more sophisticated automated workflow that triggers the reversal once your period-end close processes are run.
Consult with Sage Intacct Support: Sometimes, the best course of action is to reach out to Sage Intacct support or your account representative. They might have insights into best practices or features that could facilitate this process, especially since they often have templates or configurations that can be tailored to specific needs.
Be sure to test any automated processes in a sandbox environment first to ensure accurate results before deploying them in your live system. Good luck, and I hope you find a solution that fits your needs!