As we are building our upgrade, finance has expressed their desire to forego the setup and use of any Costing Labor Rates in the Resource Groups. The reason is that it will prevent the number of variances they currently deal with. We are build to order, and our jobs take months to complete. We never closed jobs, transacted labor poorly, and did poorly on updating Standard costs on materials.
We are Std Cost, but moving to Avg with the next release.
We have Project Management and invoice by milestones. Phase Jobs are not on the planning. The expectation is that production resources will clock their time accurately, and jobs will ship and get closed promptly. As the jobs are long term, the perception is also that labor costs hang around in WIP for months, only to move to COS when shipped.
Obviously we won’t have accurate Estimated Costs in any of the reports and graphs, what else would we be missing? I am not sure how to determine what functions depend on Costing Labor Rates? Any words of wisdom are welcome!
TIA,
P.