Non Billable Labour Essay
Where Has All My Labor Gone? – The Mystery of Non-billable Labor for AEC Firms
You know you have spent your whole workweek devoted to a specific project, but you’re only showing 35 hours being billed to the project. Where did those 5 hours go? In many cases, these missing hours can be attributed to non-billable labor and many AEC firms overlook the importance of documenting how this time is spent. However, accurately accounting for non-billable labor is extremely important when tracking and calculating overhead rate.
How Can My AEC Firm Track Non-billable Labor?
If your AEC firm utilizes Deltek Vision, then tracking non-billable labor is relatively simple.
One of the most commonly misunderstood and over used terms in Vision is “non-billable” labor. It is important to make a distinction between the labor we are billing clients and the labor that contributes to the cost of our …show more content…
On the job training
2. Rework
3. Discounts
While all valid reasons, the costs associated with this effort should be included in the project sub ledger. This is missed opportunity cost or potential lost revenue. If labor cost is nullified using either a or b above the true performance of the project becomes misstated. When reviewing project financial reports the missing cost is not there to net against revenue thereby creating a false and overstated profit amount.
This leads us to the Million Dollar question (and you won’t even need to phone a friend). There are actually at least two ways to accomplish removing time from an invoice while ensuring it remains as cost for project metric measurement.
1. Write Off the hours/cost in Interactive Billing. This removes it from the invoice and leaves an audit trail of X as the billing status on the Project Detail Report. This allows missed opportunity cost to be valued into the overall project profitability or more commonly known as a
You know you have spent your whole workweek devoted to a specific project, but you’re only showing 35 hours being billed to the project. Where did those 5 hours go? In many cases, these missing hours can be attributed to non-billable labor and many AEC firms overlook the importance of documenting how this time is spent. However, accurately accounting for non-billable labor is extremely important when tracking and calculating overhead rate.
How Can My AEC Firm Track Non-billable Labor?
If your AEC firm utilizes Deltek Vision, then tracking non-billable labor is relatively simple.
One of the most commonly misunderstood and over used terms in Vision is “non-billable” labor. It is important to make a distinction between the labor we are billing clients and the labor that contributes to the cost of our …show more content…
On the job training
2. Rework
3. Discounts
While all valid reasons, the costs associated with this effort should be included in the project sub ledger. This is missed opportunity cost or potential lost revenue. If labor cost is nullified using either a or b above the true performance of the project becomes misstated. When reviewing project financial reports the missing cost is not there to net against revenue thereby creating a false and overstated profit amount.
This leads us to the Million Dollar question (and you won’t even need to phone a friend). There are actually at least two ways to accomplish removing time from an invoice while ensuring it remains as cost for project metric measurement.
1. Write Off the hours/cost in Interactive Billing. This removes it from the invoice and leaves an audit trail of X as the billing status on the Project Detail Report. This allows missed opportunity cost to be valued into the overall project profitability or more commonly known as a