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How To: Handle Construction Jobs
Background
Often times you will be engaged to perform work on non-logging jobs. For example, you may have a road-building contract or a contract to grade and layout a subdivision. The Logger's Edge allows you to set up a job that is a construction project, prepare an estimate and budget for the job, and then track your time and materials in performing the job. You can also prepare invoices for the customer for whom you are doing the work.
Some users perform hourly work that is to be charged out directly to the customer based on an hourly machine charge-out rate and/or an hourly employee charge-out rate. Common examples include road-building jobs, firefighting work, or mechanic time spent working on a machine belonging to another company.
The Logger's Edge allows you to set up a revenue contract based on time and materials. You then set up charge-out rates for equipment and/or employees to be used in connection with this revenue contract. When you enter time slips, you indicate the appropriate revenue contract so that The Logger's Edge is able to separate time spent on regular work covered under your block contract from time that is directly chargeable to the customer at a particular hourly rate.
You can generate customer invoices for this hourly work directly from The Logger's Edge, and you can run Revenue Contract Reports that allow you to see the machine hours spent in total for a given contract, as well as a profit & loss statement for that job.
Notes:
a. Charge-out rates can be hourly rates, day rates, or some other basis reflective of time slips or production activity slips entered into the system.
b. Company-owned equipment as well as contractor equipment can be charged out. Non-employee workers can also be charged out.
c. Truck time can be charged out (as well as equipment).
d. You can also charge-out expenses on a job.
Steps Involved
1. Basic Setup BlockEnsure that you have enabled the construction checkbox in the Basic Setup (under the block setup tab) interface:
The checkbox "Enable" will enable additional menu items for handling jobs, as well as enable an icon on the toolbar that allows you to setup new jobs.
The "Name" entry is used as the global term used for jobs. For example, this name could be change to "Project" or "Work Order" or "Contract".
The Std Markup value is used to set up a markup on costs when you enter your standard cost and prices for items. For example, if you set up the item "concrete" at a cost of $75/Cubic Yard, the standard markup would be used to calculate the charge out rate (price). In this case, the price would be auto-filled with a price of $90/Cubic Yard (= $75 x (1 + .2)). The standard markup is used as a default value -- you can always override the default with any price you want.
The "Account for Misc Income" is used as the account when expenses are charged out on a job. If you charge out expenses, a miscellaneous income entry is created at the same time a miscellaneous expense entry is made. The miscellaneous income item is the amount that the customer will be charged on a time and materials contract. The account code is the income account to which you want the revenue assigned. This is a default account -- you can always edit the miscellaneous income items if you want to change the account code.
By enabling construction, new menu items will be available for construction jobs:
and will also setup a new button on the main toolbar:
2. Set Up Items
In The Logger's Edge you first need to set up basic job types like "Road Project" or "Subdivision" or "Roofing". A new job type is needed for each type of project for which you want to assign a distinct set of project stages.
You create job types by navigating to Setup | Jobs | Generic Project Types:
Each type is assigned a code and a description, as well as a job type number. You should assign a distinct code and non-zero number to each job type. In the grid above, there is an entry for "Oregon Road Construction," which will be used below to illustrate how the construction functionality works in The Logger's Edge.
Next, you need to assign discrete stages for each job type you create, such as "prep" or "paving" or "cleanup". In general, you set up the type and number of stages that makes logical sense for the type of project you are undertaking.
In the Oregon Road Construction example, there are nine (9) stages, with items such as "Bridges" or "Wearing Surfaces". Your job tracking and reporting will be based on the stages that you create, so it is important to plan ahead on how you want the project to be managed and tracked. The order is used in the job setup wizard to order the screens and in reports to set the sequence in which the data are reported.Note that within each stage, you can have an unlimited number of activities or tasks. The stages for each project type are set up under Setup | Jobs | Stages.
A job type can
have as few or as many stages as makes sense for organizing your work.
But wait! Where do the stages come from? In order to assign stages to a job type, you first need to set up generic job 'stages' for each type of job you will be performing. For example, suppose you did work on highway projects, you might have generic stages such as Planning, Mobilization, Actual Construction and Clean Up. Each type of project can have its own set of stages. Thus, road work might have different stages than bridge building or home building, although there is nothing to prevent generic stages from being used on more than one type of job.
Stages are entered under Setup | Pay Activity Groups. Practically speaking a job stage is nothing more than a set of tasks or activities, which is why we refer to a job stage or a pay activity group interchangeably.
Once you have created your generic stages, toy can then assign them to the Job Types you have set up.
Once you have set up stages, you will want to assign lower-level tasks to each stage. 'Lower-level tasks' are specific activities that would be part of a stage. For example, a stage like 'Temp Features' might comprise the specific functions like 'Mobilization', 'surveying', 'sub contractor negotiation'. The importance of the lower-level tasks is that all costs (materials, labor) will be accounted for by lower-level task. Costs are then rolled up by stage based on which activities/tasks are members of each stage (pay activity group).
If you only have
one sub-task for a stage, you will still need to enter that task in the
activities list. In the grid above, for example, the stage "0004
Bridges" has only one task (activity), namely "BRIDGEWORK."
In general, you should think of pay activities or tasks in a broad sense in that they can be any type of classification that matches how you want to track your costs.
Note: You need to set up your stages and activities before your can
run the job setup wizard.
3. Set Up Standard Cost Classes
In The Logger's Edge you also need to set up standard cost cost classes for the components of a job. For example, a cost class might be 'Day Labor', '2 x 4, 8ft', or 'Concrete' or 'Warning Signs'.
You set up your cost classes under Setup | Jobs | Standard Rates
Note that there are four subitems - Day/Hourly Work, Contract Work, Materials and Supplies, and Rentals. Each of your standard cost classes in entered under one of these four groups.
For example, suppose you wanted to set up a day rate for a Paver of $225/Hr. You would click on 'Day/Hourly Work'
In the grid above, we see a cost class for 'PAVER' (row15). The unit of measure is 'HR', the cost is $225/Hr and the Price is $265/Hr. The cost field represents the cost to you of providing the Paver; the price is the amount that you will include in your estimate (bid) to the customer.
In the row 28, we have set up an item for SAND, where the cost is set to be $9/Ton and the price is $10.80/Ton.
In the row for
sand, the price ($10.80) has been auto-filled when the cost is entered based
on the standard markup of 20% set in BASIC SETUP. You can always
override the default calculation with your own price.
Where an item has no standard cost -- for example, the item for "Pollution Control Plan" -- you should enter the item with a zero cost and make the unitof measure lump sum. Then, when you are preparing your bid, you enter the estimated cost of the plan as a single amount.
The cost classes that you set up here are generic classes of costs that are used to build up your estimate (and budget) for the job. When you are actually performing the work, you will be able to compare your actual costs (based and your actual payroll and expenditures) against your budgeted amount.
The reason we
make you go through the pain of setting up all these classes in advance of
preparing a bid is that we expect that the classes will be used repeatedly
on future bids. Thus, the pain now for the gain in bid preparation of
future bids. As long as you keep your list of classes up to date, it
will be easy to generate bids merely by selecting the items from your
preconfigured list.
In the screen below, several entries are made under the materials and supplies menu item.
Note that the the units of measure can be any measure you want to use. For example, permanent seeding is based on the ACRE and the sediment barrier is based on FOOT.
You can set up different units of measure under SETUP | PAY BASIS:
4. Setting up a Job
Once you have set your standard cost classes and your job stages and tasks, you can set up an actual job using the job setup wizard.
You run the Job Setup Wizard by navigating to Setup | Jobs | Setup or by click on the 'Jobs' button:
This selection will bring up a list of current jobs. When you first enter the system, there will be a blank grid.
In order to add a job, click the 'Add' button. This selection starts the Job Setup Wizard. The wizard will guide you through the full process of setting up a construction job.
The first page is merely an introduction to the wizard.
Click Next.
Your first step is to provide basic information about the Job. At a minimum, you are required to provide a Code and Description for the Job. You are also required to identify the 'Job Type'. The selection of the Job Type will determine the stages that follow in subsequent steps in the wizard.
In the basic information form, there are five (5) text fields (e.g. Section), 5 number fields (e.g. Days), 5 Date fields (e.g. Due Date), and 5 boolean (checkbox) fields (e.g. Is Gov't) and 5 drop-down list fields (e.g. Status) that can be configured to provide additional information about the project. These fields can be enabled by a Caribou representative.
The next step in the wizard is to identify the basic pricing terms -- that is, how you will get paid for the job.
The revenue basis for the job can be set to (1) fixed fee or set to (2) be based on time and materials. A 'time and materials' contract will require that you set up charge-out rates for your employees an/or equipment units. If you opt to charge out your expenses, you will want to identify a markup to apply to those expenses. Then, as miscellaneous expenses are entered into the system, miscellaneous income items (using your markup) are simultaneously created. For example, if you bought a load of sand for $250 and entered that as a miscellaneous expense against this job, The Logger's Edge would automatically create a miscellaneous income item for $300 ($250 marked up by 20%), thereby allowing to quickly generate an invoice for the customer for that amount.
In this form, you also specify the customer for the job (who you will invoice), the estimated starting and ending dates for the job, and whether or not you will be collecting GST and/or PST. For users in the U.S. these latter two checkboxes will not appear.
The 'Bid Price' box allows you to automatically recalculate your bid based on different markups. For example, suppose you initially prepare a bid using your standard prices based on a 20% markup. But, after further consideration of the competitive landscape, you decide that a 25% markup is more appropriate. You can enter the 25% amount in the entry box and then click the 'Recalc Bid' button. This action will instantly recalculate the prices for all items included in your bid. The Recalc Bid option allows you to reprice your bid as many times as you want in order to test different pricing strategies.
The checkbox 'Hours Qualify for Overtime' dictates whether employees who work on the job will be eligible for overtime.
The 'Customer' is the entity for which you are doing the work and who will be paying you.
When you click next, the next set steps in the wizard will allow you to build up an estimate for the job on a stage by stage basis.
For the Oregon Road project type, we have none (9) stages:
Viz:
(1) 0001 TEMP FEATURES
(2) 0002 ROADWORK
(3) 0003 DRAINAGE AND SEWERS
(4) 0004 BRIDGES
(5) 0005 BASES
(6) 0006 WEARING SURFACES
(7) 0007 TRAFFIC SAFETY / DEVICES
(8) 0008 RIGHT OF WAY DVLPMNT / CNTRL
(9) 0009 CONSTRUCTION ENGINEERING
Each stage will have a separate page in the wizard.
Let's look at the TEMP FEATURES stage:
When you add an entry, you first select a cost class. This selection will auto-fill the cost and price per unit. (The basis will also be filled in.) You next select the activity (the activities in the list will be those that you have identified as belonging to the stage). In this example, MOBILIZATION and TRAFFIC CONTOL were flagged as being members of the TEMP FEATURES stage. Next, when you fill in the units, the grid will calculate the total cost (your Budget) and the total price (the Bid column). You can add as many rows to the grid as you need to fully specify your bid. Although not shown above, there is another column that allows you to specify additional details specific to the line item -- the additional details can be used to include notes or special considerations.
Your primary activity here is to (1) identify each task or item that is required to complete the stage, (2) specify the number of units required, and (3) review and accept or edit the standard cost and price per unit. The spreadsheet does all the math for the total budget and bid costs for each item. As noted previously, you can always reprice your bid by entering a new markup that will be applied to the unit costs you enter here.
If you
double-click on the blue title bar at the top of the form, you can maximize
the wizard screen.
If you are not prescient enough to set up all your items in advance, you can add a new item by clicking on the 'New' button. For example, if ypu need to add 'Flashing Lights' to your job, click 'New' and you can add another standard cost class that is then immediately available for use on this job (or any other job for that matter).
The other stages in the job appear in similar screens as the TEMP FEATURES stage.
In the screen below, the ROADWORK stage is shown.
Note that a stage can have a mixture of labor, materials and contract work.
Also note that there is a column "ITEM_REFERENCE" that can be included in your line item budget and can be used to include a standard 'code' for a specific item (Show above with the column header 'Reference'). For example, in Oregon, the DOT uses a standard item listing for cost categories. Thus, you can use the 'Reference' column to crosswalk between your bid and the Department of Transportation's cost classes. If this field is not enabled, it will be excluded from the worksheet.
After you have completed the worksheets for each stage, you will reach a summary page that will show the full details of the project:
You costs for all stages are itemized in the worksheet. In the bottom left corner, there are two tabs that allow you to toggle between you budget (cost) and your bid (your price). You can Export the active worksheet to MS Excel or you can print the worksheet directly from here.
At the very bottom of the worksheet, you can enter percentage factors for miscellaneous expenses, project contingencies and overhead.
These factors allow you to account for expenses that are unpredictable or not directly accounted for in your estimate.
The format of a printed estimate (using the print button) is shown below:
When you click next, you will arrive at the final screen in the wizard.
You must click finish to save your new job or to save your edits.
If you are merely
editing a couple of items in the job estimate, you must still FINISH the
wizard in order to save your entries. Entries are not saved along the
way, but only save when you click FINISH.
Your job will now show up in the grid.
You can double-click on the row to edit a job or you can right click and select 'Edit' to edit a job. You can also bring up the Bid worksheet or the Budget worksheet by selecting the appropriate menu item.
When you save a
Job, a default revenue contract is setup for you behind the scenes.
The revenue contract will either be fixed fee or time and materials,
depending on your selection in the job setup wizard:
Each job will have a revenue contract associated with it. There is a one-to-one mapping of jobs and revenue contracts in The Logger's Edge.
At this point, you can now enter time charges against the Job. In The Logger's Edge, you enter time against a job by selecting the job from the list of 'Jobs" (or 'Blocks'). In other words, the 'Job'/'Block' entry does double-duty as either a block or job depending on your selection. The label that is displayed for this drop down list is configurable and can be set to the term you prefer.
Also, the activity entry is used to record the task performed. In the window above, the worker BG has performed 8 hours of time using equipment number CAT D6D #005 on the Job 'Ore 13331'. The task/activity is 'TMP WATER/EROSION MGMNT' and determines the Job line item against which BG's time will be charged.
In this example, let's assume that BG has a pay rate of $20/Hr and the machine CAT D6D #005 has a standard cost of $100/Hr. The costs will flow through to the revenue contract P&L report or the block P&L report as $160 in employee payroll and $800 in equipment costs. These two reports will show you the profit you made on a job.
The revenue contract report P&L (based solely on the above time entry) is shown below:
Suppose the job contract was set up to bill out time and materials. For example, assume that the CAT D6D #005 dozer has a charge-out rate of $150 per hour. You would first have to set up that rate for the equipment under Setup | Equipment/Trucks | Equipment | Equipment Charge Out Rates.
Now, when you run the invoice calculator, your charge-out for your equipment will be displayed on the invoice:
You can use the invoice to bill your customers.
Turning back to the revenue contract or block P&L, you will now see your charge out revenue in the top line:
The $1,200 of revenue equals the $1,200 in chargeable time for the Dozer. The contract P&L summarizes the profitability of the contract at any point in time. The report takes into all revenue and costs for the project.
There is also another report -- the Job Budget/Bid Report (Report #150) -- that allows you to compare your budgeted (or bid) costs against your actual costs:
For example, in the report above, we show actual costs of $960 for Temporary Water/Erosion Management. This is the amount of our payroll and machine costs for the dozer. You can then compare your estimate for the Temporary Water/Erosion Management task/activity against your actual cost.
Obviously, this is a simplified example, but it serves to show that you can do a side by side comparison of your estimated costs with your actual costs and determine which phases were under or over budget.