Labor Cost


When an employee enters time on a specific project it is known as charging efforts of the employee on the project for a given time frame. This time further has some cost defined to calculate the actual cost incurred by the employees on the project.

The calculation process of the raw cost for such labor/time entered is called as Labor Cost.

The time can be entered via a third party tool or via the PA pre approved batch.

To initiate the process of cost calculation, there are few setups to be created at OU level.

Pre requisite setups to initiate time entry.

  1. Implementation option to be defined in the costing tab.


The option “ Interface Employee Labor Costs” is enabled, the labor cost lines accounting is interfaced to GL.

2.    Rate schedule to be defined for cost rates.

Cost Rate: The cost rates is the basic cost defined at the employee or job level in the functional currency. This is the cost used to calculate or derive the raw cost for each expenditure item of type labor/time.

Note: For time the Unit of measure is always hours.

To define the rate schedule,

Navigation: Setup->Expenditure Rate Schedule.


Example: cost rate = 100 USD time entered for a day = 8 hours.

Raw Cost = Quantity X cost rate, hence raw cost would be 100USD X8 hours.

3.    Cost rate schedule to be assigned at the OU level.

Navigation: Setup->Costing->Labor->Oraganization Labor Costing Rules


4. Transaction source definition for time entry.

Navigation: Setup->Expenditure->Transaction Sources



Note: In an organization when a third party tool is used by employees to enter time, a customized transaction source can be defined for same.

 There are various functionalities available for treating the expenditure items created via the transaction source.

Few of them used in common are as follows:

  1. Purge After Import: The expenditure item once created will be automatically purged from the PA interface table.
  2. Allow Reversals: The expenditure items/batches created via the source can be reversed in PA.
  3. Adjustments: The expenditure items created via the source can be adjusted in PA.

Note: The other can be enabled as per the business requirements.

Once the above setups are created, we shall now see how to enter time for a project via a pre approved batch.

Step1: The entry of time via a pre approved batch

Navigation: PA responsibility -> Expenditure -> Pre Approved Batch


In the form, we need to enter the OU, batch name, ending date & class. We shall create the batch for time entry.

Click on Expenditure Items: Enter employee details.

It will take you in the below section of the form where we need to enter the date of the expenditure (expenditure item date), project code, task code and the expenditure type and quantity.

Note1 : The project should be in approved status, employee should be assigned to the same OU in which we are entering time.

Note2: When we have employees entering time on projects from other OU of different LE it is included in the ICB scope and if time entered in different OUs within same LE it is included in Borrowed And Lent Functionality Scope.

Step2: Pre Approved Batch To Be Released

Once the time has been entered the pre approved batch needs to be in status “Released” for the further costing process.

Note1: There are three statuses in the preapproved batch

Working: The transaction is being entered and the batch is still open for making changes.

Submitted: The batch has been eligible for the next process of being released, however if more changes are required, the button “Working” can be clicked to make changes as required in the same form.

Released: Once the batch is in submitted status it is eligible for getting released.

Once a batch has been released no changes will be allowed to the batch (the working button is disabled).

If changes are required in the batch at this stage the batch can be reversed.

Note2 The batches with released status is eligible for cost distribution.

Step3: Cost Distribution Process:

The new expenditure items are created and now in the cost distribution process, the raw cost (also known as basic cost in PA) has to calculated.

The newly/existing expenditure items can be viewed from the below screen.

Navigation: Expenditure->Expenditure Inquiry-> Project.

Process to calculate the cost: Execute the following program to distribute cost and interface to GL.

A streamline process “PRC: Submit Interface Streamline Processes” with parameter DXL can be executed.(DXL = Distribute labor cost and interface to GL)

The streamline process calls for the following program:

PRC: Distribute Labor Costs (The program distributes cost for all the eligible expenditure items. The cost distributed flag is checked when cost distribution flag is successfully distributed.)

PRC: Generate Cost Accounting Events (The cost events is created for process “Labor Cost“)

PRC: Create Accounting (The accounting is generated)

Accounting Program

Journal Import (Journal is imported in GL)

Posting: Single Ledger

Update Subledger Accounting Balances

Note: The above programs can be executed as single concurrent programs as well.

PRC: Distribute Labor Costs (The program distributes cost for all the eligible expenditure items. The cost distributed flag is checked when cost distribution flag is successfully distributed.)

PRC: Generate Cost Accounting Events (The cost events is created for process “Labor Cost“)

PRC: Create Accounting (The accounting is generated and interfaced to GL, posting also done if the parameter Post To GL = Yes )

In the expenditure inquiry window we can query the project and check the expenditure items entered and the cost generated for the expenditure items in the column “Project Functional Raw Cost”.

Note: Once the cost distribution has been completed successfully the cost distributed flag is auto checked by the system for the expenditure item ids. The further process ie, revenue is generated only if this cost distributed flag has been checked ie the billable expenditure items are eligible for revenue and invoice process if the cost distribution has been completed.

Note: To check additional fields in the expenditure item window, we can select it from

toolbar-> folder->show field-> cost distributed & billable fields to check the status.

Note: The non billable expenditure items incur only cost, no revenue or invoice process required for non billable items.

Cost Override:

In cases where we need the cost calculation at a different rate then the cost rate defined in the rate schedule the cost override functionality can be used.

Navigation: PA Responsibility->Setup->Costing->Labor->Labor Costing Overrides.



Enter the costing rule, override type, rate & currency. The rates would be applicable for the period as per the start and end date defined for the employee.


3 thoughts

  1. Yes it is working if it is manual entry one by one.

    But we have 100o rows per month…how to to do the same with excel/webadi


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