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To setup Cost Elements, go to Admin > 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).

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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.

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If there is only one Fringe rate, enter the same provisional Fringe rate for all Fringe Cost Elements created.

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Pros:

  • 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

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