Title: Creating a Cost Structure with one Fringe Pool and Multiple Overhead Pools
If there is a cost pool structure that requires multiple wrap rates such as Client-Site Overhead and Company-Site Overhead rates, the approach below outlines how to set up the indirect rate calculations within Unanet.
What’s covered in this document:
Create Multiple Fringe Cost Elements
In the example below, Onsite and Offsite Labor must be distinguished from one another to accommodate the Onsite-Offsite Overhead calculation. To achieve this, two different Fringe Cost Elements are created to match Direct Labor Cost Elements (Onsite and Offsite).
To setup Cost Elements, go to Admin > Setup > Accounting > Cost Elements, and create as many Fringe Cost Elements as needed to match the Direct Labor Cost Elements.
In this example, a Fringe Cost Element was created for both Client Site Labor (Onsite) and Company Site Labor (Offsite).
When setting up the Indirect Costs formulas, go to Admin > Setup > Accounting > Cost Structures > Indirect Costs tab:
- Each Fringe Cost Element should consist of at least:
- One Labor Cost Element
- Each Overhead Cost Element should consist of:
- One Labor Cost Element, at least; and
- One Fringe Cost Element.
If there is only one Fringe rate, enter the same provisional Fringe rate for all Fringe Cost Elements created.
- Easy to setup formulas (one-to-one relationship)
- Fringe Calculation is the same for both Onsite and Offsite
- Easy to validate when running cost reports
- Requires multiple cost elements to maintain and map
- Requires mutlitple cost structures to settle fringe into a single pool
Note: Unanet recommends the above method instead of attempting to limit the number of cost elements by allocating portions of some cost elements based on a ratio of other cost elements. The problem with the limiting/allocation approach is that it doesn’t work over multiple fiscal years. The solution above does work over multiple years.