It is always advisable to factor in the labor cost when considering the cost price- selling price relation.
To start off, let's look at how an employee's labor cost is usually calculated: the employee's hourly wage multiplied by the number of hours worked.
When computing how much it costs to service a unit and before quoting your customer, the labor cost is to be taken into account, to make sure you'll turn a profit.
There are two possible ways to have Smart 145 calculate the labor cost in Work Orders. These options are generally managed by our Engineering Team. Read on to discover which one you see more suitable for your company.
1- To set up or fix a ratio between the labor cost and the labor price.
To settle on a percentage-based calculation type, i.e., to compute the cost as a percentage of the labor price, you'll need to set up the default percentage value.
And that is it, you'll have the cost populated once you plug in the hours and the hourly rate, in the relevant boxes.
Notice the hourly rate will be pulled from the Customer's file- check the image below.
In the following example, the labor cost is set to default to half of the labor price. Another way to see it is that the cost will be 50% of the price calculated.
2- If you prefer to show the actual labor cost instead of a ratio, i.e., the real worked hours by the employee's hourly wage, the system will keep a record of and tally up the number of hours every time an employee clocks in and out of the Work Order you are quoting.
The employee's hourly wage will be set up in the employee's record.
The number of hours will be then multiplied by the employee's hourly wage, and that is what will populate in the labor cost box.
