Reasons for positive time reporting
Financial Organizations must adhere to audit regulations. These regulations require certain employees to take vacation for 1 to 2 continuous weeks. In addition to maintaining correct leave time recording, this process gives the visibility to make sure audit regulations are satisfied.
Healthcare Providers must adhere to strict staff to patient ratios. They require all exempt and non-exempt employees to record in and out times to make sure they fall within mandated guidelines. They must know who is on site at all times to assure proper patient care.
All Publicly Traded Organizations fall under FASB guidelines including SOP 98-1: Accounting for the Costs of Computer Software Developed or Obtained for Internal Use. This rule pertains to IT departments deploying software applications, and dictates what portion of the time committed to the project can be expensed and what portion must be capitalized. Positive time reporting is the only method that will satisfy SOP 98-1.
Most Time and Attendance applications are unable to calculate the complex rules for exempt project tracking. They can track project time for hourly employees because it only requires a simple formula: Hourly Wage or Shop Cost X Time Spent on Project = Project Cost. This formula doesn't translate for exempt employees because they don't have a set hourly rate to factor in.
Example:
The following example shows an exempt employee working for three weeks on three different projects. We are going to apply project costing by breaking his monthly salary of $4000 down to $1000 a week, and then determining his hourly value by dividing $1000 by the total number of hours worked per week.
|
Week 1 |
Week 2 |
Week 3 |
| |
Total Hours Worked: 20 |
Total Weekly Hours: 40 |
Total Weekly Hours: 60 |
Hours |
Hourly Value |
Billable Cost |
Hours |
Hourly Value |
Billable Cost |
Hours |
Hourly Value |
Billable Cost |
Project A |
10 |
$50 |
$500 |
10 |
$25 |
$250 |
10 |
$17 |
$167 |
Project B |
5 |
$50 |
$250 |
15 |
$25 |
$375 |
20 |
$17 |
$333 |
Project C |
5 |
$50 |
$250 |
15 |
$25 |
$375 |
30 |
$17 |
$500 |
Even though Bob committed the same 10 hours a week to Project A; the labor cost varied from $500 to $167.00. Traditional time and attendance systems lack the depth and complexity for consistent calculations of billable costs.
Legiant has worked with diverse companies of all sizes and industries. Our parameter driven software is capable of handling complex project tracking rules, and our experienced specialists are able to provide insight on issues including change management and employee acceptance.
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