How to set up hour categories

• Direct hour category. Intended for hours that can be booked directly on a production order. The financial posting is determined by WIP (through the production group) of the order and the accounted hours account associated with the operation. Examples: sawing, turning.
• Indirect hour category (booking as costs). Intended for hours that are indirectly worked. A distinction can be made between whether they are booked on a production order or not. If the hours are booked on an order, the settlement is financial, as with direct hour type and otherwise according to indirect not on order. Example: drawing.
• Indirect hour category never on order (booking as costs). Hour type at which no order can be addressed. A financial entry is placed directly on a cost account for processed hours, which is entered under entry/cost account for responsible hours. Example: administration.
• No cost entry (indirect). Intended for hours that must be accounted for, where no financial entry has to be generated. This hour type is used, for example, when only presence is registered. This type is specially intended for booking indirect hours. Examples: education, course.
• No cost entry (absence). Intended for hours that must be accounted for, but for which no financial entry has to be generated. This hour type is used when only presence and absence are registered. Examples: vacation, time for time, illness.

Multiple hour categories of the same type can be defined in the table; direct hours classified by type of work (turning, milling, construction work). The handling in terms of overtime is recorded in this table for each hour category. Account can be taken of overtime calculation on the cost side (net price per hour + %) or the billable side ( billable rate + %).

The settings in this table have an effect on the cost price and the revenue of orders, when it comes to pricing based on actual costing where overtime is charged to the customer (for example, at a service company that solves malfunctions at night).

The process table Hour categories

In the case of a Basic financial structure the indirect wage costs are included in the declarable rate and the job grade for an employee ensures the linking a price per hour for hours on a production order (possibly billable rate or one rate for man and machine). Indirect hours can be registered, but do not result in a financial change.

Depending on the chosen hour category, ledger accounts must be linked. The philosophy behind this is not covered here. For more information, please contact your MKG consultant.