Introduction

Labor is a finite resource that in generally estimated with higher margin than materials and equipment. As such, it is critical to optimize labor setup to enable accurate forecasting and execution of profitable jobs.

There are four main components to setup labor in Q360:

• Labor masters
  • Labor masters are cost codes that you estimate and sell, and carry average loaded cost and selling prices.
• Time billing (TB) categories and subcategories
  • Time billing categories and subcategories allows individuals to record type of effort being put into a job.
• Labor rates
  • Labor rates connect time billing categories, subcategories, and labor masters. It further allows you to set minimum hours and rounding rules for the purpose of automating service billing.
• Labor type
  • Labor type is an attribute of an employee and connects it to the time billing category, which is required for labor forecasting. Each employee should be setup with a labor type.

Labor is tracked in Q360 in the following areas:

• Projects and project pre-sales
• Service
• Internal Admin

Project and Project Pre-sales

Projects are generally complex, longer duration, and requires multiple different resources to contribute to the project.  Projects also go through several different phases.  A single resource may contribute to the project at different phases, potentially doing different type of work. Thus, it is important to determine all the different phases and types of work that the project will go through.  This helps to determine your estimation process as well as your project work breakdown structure (WBS).

The examples demonstrate the types of work and time billing categorization:

Labor Master	Time Bill Category	Description
PROJMGMT	PROJMGMT	Project Management
ENGINEERING	ENGINEERING	Engineering
PROGRAM	PROGRAM	Programming
CAD	CAD	CAD Drawing
INSTALL-PREWIRE	INSTALL-PREWIRE	Installation Prewire
INSTALL-TRIM	INSTALL-TRIM	Installation Trim
INSTALL-FINISH	INSTALL-FINISH	Installation Finish
COMMISSIONING	COMMISSIONING	Commissioning
RACKBUILD	RACKBUILD	Rack Build
TRAINING	TRAINING	Training

The above is an example of labor and phase the project would normally go through.  These same labor codes will also be used as part of your project estimation.  When project is awarded, the Project Manager will have a budget for each labor/phase code must be managed to complete the project.

 

Service

Labor on a service call is entered to track all the time spent in addressing the service call. Time billing categories here are generalized. Examples include the following:

Labor Master	Time Bill Cetegory	Description	Min.	Rounding
SERVICE	SERVICE	Service Labor	1	0.5
EMRGSERVICE	EMRSERVICE	Emergency Service	1	0.5
TRAVEL	TRAVEL	Travel	0	0

Minimum hours and rounding setup on the labor rates plays an important role in service call billing rules.  It will determine the overall time booked against the service call and assess the minimum hours and necessary rounding to generate an invoice.

 

Travel Time

Travel is a necessity on all projects and for the majority of service calls.

• Travel for projects
  • Travel time (especially extended travel) should be estimated based on the scope of the project and the number of trips that will be required. While the goal of this estimate is not to be completely accurate, it is important to budget for travel as this is a real cost to a project.
• Travel for service
  • For service related work, it is important to track travel time separately then the actual onsite work. This allows you to better analyze the “wheel” time (non-productive) type work, and helps to determine better scheduling and dispatching strategies.

Internal Admin

Admin time refers to time recorded that is not attributable to a customer job such as projects, calls, and pre-sales opportunities, and is therefore not chargeable.

In Q360, admin time is typically booked using time bills against a year-round admin project, with a task assigned to each employee for booking such time. In certain cases, special internal projects can be created for admin time related to specific internal projects, such as training.

Examples of additional setup to this type of  labor tracking include the following:

Labor Master	Time Bill Category	Time Bill Subcategory
MISC-LABOR	ADMIN
MISC-LABOR	ADMIN	PTO
MISC-LABOR	ADMIN	HOLIDAY
MISC-LABOR	ADMIN	SICK
MISC-LABOR	ADMIN	BEAREAVEMENT
MISC-LABOR	ADMIN	JURY DUTY

 

Labor Types

Labor types are somewhat consistent across different companies that use Q360, and aim to abstract the pool of time billing categories into a higher-level types and tie those types to employees capable of performing such types of work. As a result, Q360 will have the information to report on current and future labor capacity.

To achieve this, use the following guidelines:

1. Review your global list of labor types from Q360 general codes.
2. Ensure each employee has labor type designation filled out in their employee profile. You can also fill this in the employee’s load sheet.
3. Ensure each employee has their available hours filled in their employee profile. You can ask your Q360 implementation team to set those hours across multiple employees at once.
4. Ensure each time bill category has an associated labor type in Q360 general codes. Focus on time bill categories where forecasting and capacity planning is required.

Once setup is complete, implement the following process:

• Project managers schedule high-level project tasks in advance and assign them to team members through sub-tasks
• Projects tasks and sub-tasks carry effort (hours) estimation
• Service dispatchers schedule service calls

With setup completed and procedures followed, you can take advantage of Q360 Labor Capacity Forecast live data report.

 

Frequently Asked Questions

What if we don’t want to display our labor estimate on our proposals?

This is fine. Your proposals can be designed to suppress all labor items into a single line. However, it is important to estimate by different labor/phase codes to provide a realistic labor budget to the Project Manager.

Published: May 17, 2021