Creating Labor Rate Groups for Job Cost (Optional)

If you are also using Service Management, you can use labor rate groups to bill job customers. Labor rates are billed using a special profit type for labor-only cost codes, and are used to establish a billing amount for labor transactions. Labor rates can be set up to reflect different billing rates for different pay codes, such as regular time, overtime, or other premium rates. Billing rates also reflect different skill levels.

Cost codes with labor rates are created during setup and assigned to payroll transactions by employee. You can create labor rates by pay code and position or by pay code, position, and department.

If you have Service Management, you can use labor rates with Microsoft Dynamics GP Payroll, Signature TimeTrack, and Signature Job Cost transactions. Jobs must have a contract type of Cost Plus or Cost Plus NTE to use labor rates.

Creating Labor Rates by Pay Code and Position

You create labor rate groups by pay code and position using the Labor Rates window.

Step 1: Save the Profit Type Setup Window

You must save the Profit Type Setup window to enable the profit type: 9 - Service Labor Rate Group.

1. Select Microsoft Dynamics GP > Tools > Setup > Job Cost > Cost Code Setup > Profit Types.
2. Select Save.

Step 2: Create Labor Rates

1. Select Microsoft Dynamics GP > Tools > Setup > Job Cost > Cost Code Setup > Labor Rates.
2. Complete the following fields, as necessary.
   • Labor Rate Group Name
     Enter a labor rate group name.
   • Position
     Use the lookup window. You can use the ALL value to represent all positions.
   • Pay Code
     Pay codes are used to distinguish between labor rates with the same labor group name and position. Each labor rate group may have multiple billing amounts for a combination of positions and pay codes. For example, a Preferred labor group may have an overtime rate and a regular time rate for technicians, supervisors, and helpers. You can use the ALL value to represent all pay codes.
   • Description
     Enter a description. For example, Supervisor - Regular or Supervisor - Overtime would differentiate one pay code from another.
   • Billing Amount
     When you enter the payroll transaction, the billing amount will be calculated as the amount entered in this field multiplied by the quantity entered in the payroll transaction.
   • Fixed OH per Hour, OH Percentage
     These fields do not apply to Job Cost transactions; they only apply to Service Management. Therefore, values entered in these fields will be ignored. Overhead will be calculated using the overhead detail codes set up in Job Cost for the position/pay code combination.
3. Select Save.

You can delete a labor rate group record by double-clicking a record and selecting Delete twice. You can delete a labor rate group only after each record within that group is deleted. After each record is deleted, select Delete again to delete the labor rate group.

Step 3: Assign Labor Rates to Cost Codes

You assign labor rate groups to cost codes in the Master Cost Codes Setup window. Only cost codes with a profit type of 9 can be assigned labor rate groups.

1. Select Microsoft Dynamics GP > Tools > Setup > Job Cost > Cost Code Setup > Master Cost Codes.
2. Select a Cost Code.
3. In the Profit Type ID field, select 9 - Service Labor Rate Group.
4. Enter a Labor Rate Group.
5. Select Save.

Step 4: Assign Cost Codes to Jobs

Cost codes that have a profit type of 9 must be assigned to the appropriate jobs. These jobs must have a contract type of Cost Plus or Cost Plus NTE. See Adding Cost Codes to a Job for information on assigning cost codes to jobs.

Creating Labor Rates by Pay Code, Position, and Department

Step 1: Save the Profit Type Setup Window

You must save the Profit Type Setup window to enable the new profit type: 9 - Service Labor Rate Group.

1. Select Microsoft Dynamics GP > Tools > Setup > Job Cost > Cost Code Setup > Profit Types.
2. Select Save.

Step 2: Select Setup Options

To use labor rate groups that are based on the department, you must mark the Use department for profit type 9 service labor rate groups checkbox in the Setup Options window.

1. Select Microsoft Dynamics GP > Tools > Setup > Job Cost > Job Cost Setup > Setup Options.

2. Mark the Use department for profit type 9 service labor rate groups checkbox. 

   

   We recommend that you do not unmark the checkbox after it has been marked, especially after transactions have been posted with the checkbox marked. If you unmark the checkbox, you must set up your labor rates again.

3. Select Save.

Step 3: Create Labor Rates

1. Select Microsoft Dynamics GP > Tools > Setup > Job Cost > Cost Code Setup > Labor Rates.
2. Enter the Labor Rate Group Name.
3. Enter an Overhead Group. See Setting up Overhead Group Codes.
4. Select the Default button. This will populate the scrolling window with individual records associated with the overhead group.
5. To add a description and billing amount for a record, double-click a row in the scrolling window. The Billing Amount field shows the rate charged for a labor group name, specific position, specific department, and corresponding pay code. Leave the field blank to create a zero-dollar billing amount.
6. Save the new labor rate group by choosing Save. You can delete a labor rate group record by double-clicking a record and choosing Delete twice. You can delete an entire labor rate group only after each record is deleted. After each record is deleted, select Delete again to delete the labor rate group.

Step 4: Assign Labor Rates to Cost Codes

You can assign labor rate groups to cost codes in the Master Cost Codes Setup window. Only cost codes with a profit type of 9 can be assigned labor rates. See Setting up master cost codes for more information.

1. Select Microsoft Dynamics GP > Tools > Setup > Job Cost > Cost Code Setup > Master Cost Codes.
2. Select a Cost Code.
3. In the Profit Type ID field, select 9 - Service Labor Rate Group.
4. Enter a Labor Rate Group.
5. Select Save.

Step 5: Assign Cost Codes to Jobs

Cost codes that have a profit type of 9 must be assigned to the appropriate jobs. These jobs must have a contract type of Cost Plus or Cost Plus NTE. See Adding Cost Codes to a Job for information on assigning cost codes to jobs.