Job Costing Module

Mascidon LLC
January 2020

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Table of Contents
Job Costing Module....................................................................................................................................... 1
Job Costing .................................................................................................................................................... 3
Labor Job Cost Entry ................................................................................................................................. 4
Figure 1.1 Labor Entry Screen ................................................................................................................... 4
Figure 1.2 Labor Attachments................................................................................................................... 5
Figure 1.3 Employee Setup ....................................................................................................................... 6
Figure 1.4 Item Setup to get ‘Department’ Rate /Hour ............................................................................ 6
Inventory Job Costs ................................................................................................................................... 7
Figure 1.5 Inventory Issues Transaction ................................................................................................... 7
Job Costs from Purchases ......................................................................................................................... 7
Figure 1.6 A/P Invoice for Purchase Specific to a Job ............................................................................... 8
Figure 1.7 Charging Miscellaneous Expenses to a Job .............................................................................. 9
Job Master ................................................................................................................................................ 9
Figure 1.8 Job Master Setup ................................................................................................................... 10
Figure 1.9 Job Cost Sheet ........................................................................................................................ 11
Figure 1.10 Job Labor Entry Report......................................................................................................... 12
Figure 1.11 Job Cost Report Selections ................................................................................................... 12
Figure 1.12 Job Cost Report .................................................................................................................... 13
Figure 1.13 Job Costs – Non Labor .......................................................................................................... 14
Figure 1.14 Job Labor – Selection Criteria .............................................................................................. 14
Figure 1.15 Job Labor (Sorted by Employee) .......................................................................................... 15
Figure 1.16 Job Sales ............................................................................................................................... 15
Figure 1.17 Job Summary ........................................................................................................................ 16
Installation of the Job Cost Module ............................................................................................................ 17

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Job Costing
The job cost module is intended for companies that need to track costs of jobs. The job cost module
tracks labor, purchases or issues of inventory and any associated costs such as freight. The costs of
these transactions are accumulated and reported. Both pending and realized costs are reported. There
are no new general ledger requirements for this module.

There is a jobs maintenance screen provided to maintain jobs. Jobs have start and end dates – with the
option to leave end dates open. Jobs can be associated with a customer or not. Job types are fixed
price, time and materials and cost plus.

Labor costs are entered as job costs using a labor entry document. This screen requires the employee
alternate id (badge number in most plants) to define the person performing the labor. The rate per
hour is defined using the standard cost of a ‘Labor’ type item in the inventory (non-stocking item).
Adjustments to the labor costs can be made by entering negative hours.

Non labor costs are reported against the job using standard SAP documents for vendor related
expenses. Different screens within SAP Business One can be used to report expenses. The standard
method of applying costs from vendors against a job is to create an A/P invoice. Reducing these costs is
done using an A/P credit memo. Non labor costs are reported against the job if the PO goods receipt
has been made but the A/P invoice has not yet been processed. Likewise, reductions to the cost of the
job are reported when a vendor goods return has been made without an accompanying A/P credit
memo. Purchase orders and A/P invoices and A/P credit memos can include ‘freight’ charges that need
to be applied to the job. ‘Freight’ could be any kind of expense item reported in the ‘Freight’ popup in
the SAP screen – such as freight, insurance, etc.

Inventory costs are applied to jobs by issuing inventory against a job using the inventory issues screen in
SAP. The job inventory charge is the quantity issued multiplied by the then current inventory cost.
Inventory cost adjustments use the inventory goods receipts transaction to reduce the inventory cost.

In addition to tracking the costs to a job, the Mascidon job cost module also tracks outstanding purchase
requests and purchase orders specific to the job. This gives a more complete picture of the potential
costs to be incurred against an open job. In reports, these transactions are reported as ‘Pending’.

In some, but not all cases it is possible to track sales related to a job. For instance, if you create a job
and then invoice your customer for a job, all the sales documents could reference the job and this
module will report this activity. This does not apply if the job is an internal tracking mechanism and is
unrelated to the sales documents.

This module provides a simple means to track the costs related to open jobs. If you have already
implemented SAP Business One and need this functionality it has been designed to have no effect on the
G/L. The posting of labor requires only the use of the employee file and at least one inventory item set
up to define the rate / hour. Actual labor costs in the G/L are the result of payroll costs. If these costs
need to be applied to a ‘jobs work in process’ account then a report provided in the job cost module
showing the labor transaction costs for a period is used to define the G/L journal to create.

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Labor Job Cost Entry
The labor cost entry screen is shown in Figure 1.1. The user enters the employee id and the employee’s
name is shown. There is a lookup on the employee id which shows the employee id, badge number and
employee name. The date defaults to the document posting date and can be overridden. The
‘department’ must be an inventory item that is non-stock and have an inventory type of ‘Labor’ and a
standard cost defined. Multiple such items could be defined to allow for different labor costs by
department. The rate / hour is the standard cost for this department and it displays automatically after
the department is entered. The user continues by entering the hours, the job and the description of the
work performed. There is a lookup on the job field which shows the job number and the description.

The limitations on the entry are:

 Employee must exist in the employee file

 Employee must be ‘Active’
 Department item must be ‘Active’ in the item master
 Job must exist
 Job must be open
 Rate / hour cannot be zero

Figure 1.1 Labor Entry Screen

There is the ability to ‘attach’ documents to the labor entry screen. One of the attachments is in the
header portion of the screen. If labor is reported by department from the floor and contains multiple
employee times, then a picture of this document could be entered as an attachment in the header. The
second attachment is a tab on the screen. This opens up the screen as shown in Figure 1.2. It allows for
the entry of multiple attachments. Note: an attachment can be any type of document – pictures, pdf,
text files, cad drawings, etc. The only limitation is that the user must have access to this type of file
display in order to use it. i.e. if the attachment was a CAD drawing the user must have access to the CAD
program.

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 Figure 1.2 Labor Attachments

Setup for the labor entry requires employees to be defined. Figure 1.3 shows an employee with the 2
critical fields required – the ‘Ext Employee No’ and the ‘Active Employee’ flag. The remaining employee
information in the employee file, except for the person’s name, is not used by the labor entry module.

Figure 1.4 shows an item set up as the ‘Shop’ department. It is not an inventoried item. It is a ‘Labor’
item type and it is set up for standard costing. This sets the rate / hour for the ‘Shop’ department
personnel. In Figure 1.4 I have set up a warehouse for labor (20). This is recommended but not
mandatory.

From within the Labor entry screen the user can ‘right click’. The option to ‘Close’ this document will be
presented. Closing a labor document means that no changes can be made to the document. If you have
several people entering labor transactions you may want to have one person responsible for closing the
documents.

The option to ‘Remove’ a labor document is not available. If you need to remove a labor document for
some reason, use the query ‘Delete labor document’. Access to this query should only be available to
authorized personnel as it can ‘wipe out labor entry’.

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 Figure 1.3 Employee Setup

Figure 1.4 Item Setup to get ‘Department’ Rate /Hour

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Inventory Job Costs
Inventory can be issued against a job. This contributes to the cost of the job based on the quantity
issued and the cost of each item issued. The cost is determined based on the inventory goods issue
transaction which follows the inventory valuation method for the item – FIFO, Average or Standard Cost.

Adjustments to the inventory quantity issued to the job can be adjusted by entering an inventory goods
receipt transaction for the same item and job.

Figure 1.5 Inventory Issues Transaction

Job Costs from Purchases

Purchases can be charged to a job. There are 2 types of purchase orders – service type and item type.
Purchase costs ultimately end up as A/P invoices. The normal SAP process is: Purchase Request 
Purchase Order  PO Goods Receipts  A/P Invoice. The costs are allocated to the job as follows:

Service type purchases:

 Open Purchase Requests linked to a job are reported as ‘Pending’ job costs. These pending
costs go away as the Purchase Order is created and subsequently received and invoiced by the
vendor.
 Open PO costs against a job that have not been received nor invoiced will be shown as pending
costs against the job (and will be included in job cost totals).
 PO Goods Receipt associated with this type of PO and an A/P invoice has not yet been created
will be reported as ‘Pending’ costs.

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 o If PO Goods Receipt is only a partial receipt against the purchase, then the remaining
amount will show up as a pending cost against the job (unless the PO is closed, in which
case any remaining costs are no longer pending).
 The PO Goods Return and the A/P Credit memo are used to make adjustments to the job costs.
For instance, if you purchase goods or service for a job and it is defective, the goods return
followed by the A/P credit memo reverses the cost charged to the job. Like a purchase order, a
‘Goods Return’ is a ‘Pending’ cost since the cost is not incurred (reversed) until the A/P Credit
Memo is processed.
 A/P invoice(s) associated with service type POs are applied as costs to the job
o If the A/P invoice is only a partial invoice against the purchase (i.e. PO was for $800 and
the A/P invoice was for $600), then the remaining amount will show up as a pending
cost against the job (unless the PO is closed, in which case the remaining $200 is no
longer pending).

Item Type Purchases:

 PO’s with items associated as costs to the job will not be reported as job costs but will be
reported as ‘Pending Costs’ prior to PO Goods receipts. The actual costs to the job are not
incurred until the items are ‘Issued’ to the job (inventory goods issue).
 There are adjustments to purchases.

Figure 1.6 A/P Invoice for Purchase Specific to a Job

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Figure 1.6 shows the A/P invoice line with the associated job. In some instances the freight /
miscellaneous charges on an A/P invoice must be applied against a job. Figure 1.7 shows this type of
charge being applied on an A/P invoice.

Figure 1.7 Charging Miscellaneous Expenses to a Job

Note: freight and miscellaneous costs in the PO Goods receipts and the Vendor Goods Return
documents are reported as pending. These are reported as actual costs on the A/P invoice and A/P
credit documents.

Job Master
The screen shown in Figure 1.8 is used to create or edit a job. The fields on this screen are:

 Job – jobs can be up to 50 characters in length. There are no validations being made to the job
code.
 Description – this is 100 characters in length
 Start date – this date limits cost transaction dates for the job. For instance, if a job has a start
date of 02/01 and a cost transaction against this job has a date prior to 02/01, then it will not be
accepted.

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  End date – this date can be manually entered and can be any date after the start date. It can be
left empty when creating a new job.
 Status – a job can be open (O), closed (C), or cancelled (X).
 Job type - a job can be TM – time and materials, FP – fixed price, or CP – cost plus.
 Customer – this is an optional field. Internal jobs would not have a customer code. It can be
any valid customer that is active. The customer name will be displayed.
 Fixed Price – if the job type is fixed price, this field should be filled in.
 Comment – this description can have 250 characters.

Figure 1.8 Job Master Setup

The line items on the job maintenance screen provide the means to attach as many documents as
necessary to the job. For instance, several drawings / specifications for the job may be attached. Or you
could attach correspondence from the customer regarding this job.

After the job is closed, no further transactions can be applied to the job. Run the Job cost report to
show only the ‘pending’ costs. This report should be ‘empty’ to ensure there are no outstanding costs
pending before closing the job.

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There are three Job Cost Crystal reports in the system along with several job cost queries. The Crystal
reports are:

 Job cost – job sheet – this prints a cost sheet on which to manually record transactions on the
shop floor for later input into SAP
 Job labor document – this reports the labor entered against jobs
 Job Cost report – this shows the costs associated with any job. It can be printed in summary or
detail.

The job sheet report is shown in Figure 1.9. It can be printed and distributed to personnel on the floor
to record costs associated with a job.

Figure 1.9 Job Cost Sheet

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The job labor entry report is shown in Figure 1.10. This is a report of labor entered by the labor
document. One labor document could report labor costs against multiple jobs.

Figure 1.10 Job Labor Entry Report

The job cost report has several options as shown by the report prompt in Figure 1.11. Pending costs are
shown with a yellow background.

Figure 1.11 Job Cost Report Selections

 Job status – can be Open, Closed or Cancelled

 Job – can be a specific job number or enter the word ‘All’ to report all jobs
 Start date – enter the starting date to report
 End date – enter the ending date to report
 Summary? – if yes, then only the totals by job category (A/P Invoice, PO, etc.) will be reported.
Otherwise every transaction for the job will be reported.
 Pending Only? – if yes, then only pending cost transactions will be reported

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 Figure 1.12 Job Cost Report

In addition to the Crystal reports, there are 4 ‘query’ reports.

 Job costs non labor – see Figure 1.13

 Job labor – see Figures 1.14 and 1.15
 Job Sales – see Figure 1.16
 Job Summary

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 Figure 1.13 Job Costs – Non Labor

Figure 1.14 Job Labor – Selection Criteria

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 Figure 1.15 Job Labor (Sorted by Employee)

Figure 1.16 Job Sales

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 Figure 1.17 Job Summary

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Installation of the Job Cost Module
Components of the installation:

1. SQL ‘view’ dcm_vw_jobcosts – this view is used for generating job cost reports.
2. Queries and formatted searches:
a. There are two query ‘categories’ – ‘Job Reports’ and ‘Jobs’. The query reports are
placed in the ‘Job Reports’ category while all other queries and formatted searches are
placed in the ‘Jobs’ query category.
b. Job Reports - Category
i. Job Costs non Labor
ii. Job labor
iii. Job Sales
iv. Job summary
c. Jobs
i. Close labor transactions this date
ii. Close labor transactions this document
iii. Close the job
iv. Delete labor document
v. Get customer name – job maintenance (formatted search)
vi. Get default labor date (formatted search)
vii. Get employee id (formatted search)
viii. Get employee name (formatted search)
ix. Get extended amount labor (formatted search)
x. Get rate per hour labor (formatted search)
xi. Get the default labor date (formatted search)
xii. Lookup Customer
xiii. Lookup Employee
xiv. Lookup Labor Item
xv. Lookup Open Jobs
xvi. Vendor Quote Requests
3. Tables Required – these may be installed manually by creating new tables, or alternatively they
may be installed as part of the ‘Solution Packager’.
a. DCMJOBPARAMETERS – Job Parameters (No Object with Auto Increment)
i. Only used to create field names for queries (December 2019)
b. DCMJOBS – Job File (Master Data)
c. DCMJOBSATTACHMENTS – Job File Attachments (Master Data Rows)
d. DCMJOBLABOR – Job Labor Transactions (Document)
e. DCMJOBLABORDET – Job Labor Transaction Details (Document Rows)
f. DCMJOBLABORATC – Job Labor Attachments (Document Rows)
4. The stored procedure SBO_SP_TransactionNotification needs to be modified to call the stored
procedure DCM_sp_Job_TransactionNotification.
5. The stored procedure DCM_sp_Job_TransactionNotification needs to be added.

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 6. Three Crystal reports need to be imported into the database:
a. Job Cost – Job sheet
b. Job Labor Document
c. Job Cost Report
7. User Defined Objects need to be defined
a. Jobs – Job Maintenance
b. JobLabor – Job Labor transactions
8. Attach the formatted searches to the fields on the UDOs

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