Transfer Labour Costing

Owned by Malcolm Mackay
Last updated: Dec 02, 2024 by Maria Harreguy
3 min read

Sometimes it is desirable to apply a different labour cost for work done on another part of the business. This can be achieved with Labour Transfer Costing.

The Transfer Basis For Time Control Parameter drives this.

If set to Profit Centre, then transfer costing is applied if the profit centre of the person is different from the profit centre of the job on the timesheet line.

If set to Group* (or is not specified), then transfer costing is applied if transfer costing group of the profit centre of the person is different from the transfer costing group of the profit centre of the job on the timesheet line. The Transfer Costing Group is an attribute specified on the profit centre.

The rate at which transfer costing is applied can come from two places.

Employee Class

Generally the transfer cost rate is determined by the employee class of the timesheet user.

Time Code

But it is also possible to be more sophisticated with transfer costing by applying transfer cost rates on time code lines.

If by percent, the transfer cost rate will be calculated as a percentage of the employee class transfer cost rate.

If by rate, the specified cost rate from the time code line will be used, and take precedence over the employee class transfer cost rate.

As is the case generally with time codes, if there is more than one time code line that matches, then the most specific one is applied.

When posting the Labour Journal, the difference between the standard labour cost rate and the transfer cost rate is allocated to Internal Profit.

Note that transfer costing is totally optional. It will not be applied if there is no Transfer Cost Rate specified, or if the cost basis is by group, and there are no transfer costing groups specified on the profit centres involved. Also, if transfer costing is applied for time, it now takes precedence over EBA costing.

 

 

*The Branch option that was available in the MDE (Workbench legacy desktop application) has been replaced with 'Group', which uses a new attribute on profit centres called the Transfer Costing Group.