Labour Set As Stock Items

[chris_fawcett]

Hi

We run an M&E company which sells labour & materials using sap business one.   The labour amount we incur is not directly variable to the Sales item as this can vary on job to job.  Therefore when we raise an invoice, we add the sales item (materials, service, installations etc ) but then also add an item labour line which is hidden from the customer invoice and has no sales value.  This has a standard cost, which we then use an invoice/Job  costing method in sap to asses the GP of each invoice.  

We now want to asses the standard amount of labour hours and cost which are being posted to invoices against our actual which is compiled and paid out of sap in sage payroll

Please can you advise the best method to do this?

At present we have found a solution but it will result in changing the labour items, to stock, posting a purchase invoice for the actuals to a labour wip account on the balance sheet and then as the invoices are raised the labour items (hours) would be posted from the wip account on the balance sheet to the expense account on the P&L.  We could then asses the remaining hours over or under posted as a stock item and asses the cost in the control account?

Please can you advise if this is the best method?  We are reluctant to set labour items as stock.  Can this be simplified using a bom etc?  I have read some posts regarding assessing labour, using the item code through a service module?  But I cannot find any further information on this? Please advise?

Kind Regards

Chris 🙂

[frank_wang6 · Accepted solution]

You can create labor as Non-Inventory method and use standard cost method and set it to your hourly rate such as $10.

Set the expense account on this item to the A/P wage account.

And now you create BOM for your item, and add this Labor into it with correct hours as the quantity.

Frank