Workbench Labour Journal
The following is the recommended treatment of the workbench Labour Journal.
The Labour Journal accounting entries are:
Debit – Job Profit Centre and Activity Code GL
Credit – Employee Profit Centre and Employee Class GL.
Recovery rates should be determined by dividing total budget cost by the expected number of hours to be charged to projects. The theory therefore is that if you worked the required number of hours all wage and overhead costs would be transferred to Cost of Sales. The Net (Over)/Under Recovery is therefore a combination of rate variance and utilization. By comparing Chargeable Hrs in Workbench with total Paid Hours from payroll you can quickly see if you are recovering more or less hours than budgeted in your recovery rate calculation, the balance will be a rate variance which should not be significant.