Members
Purpose
The purpose of this table is:
1. To identify a bot
2. To implement the Admin Cost Factor setting. This setting is turned on in the Options Table under Time Logs/Admin Cost Factor.
3. To allocate time to engineers who do not log work for individual clients (Admin Allocations), but enter client related work under the MSP (administrative time). The category includes line managers and dispatchers.
Settings
To change any of the settings listed below, first click on the Edit Members button.
Identify a BOT
A "bot"is a fabricated member created by the MSP's RMM tool. This member generates time records with an abnormally high number of records, but these time records are background functions done by the RMM tool, not an engineer. In some cases, the count may be a multiple of the next highest entry. Since this time is not actual engineer time, it should not be included in the time the engineers work on clients. The goal is to identify the bot so those records are removed when calculating such ratios as FFA effective rate and efficiency ratios.
More than one member may be designated as a bot.
To set up a bot, go to the Lookup/Members table. Set the 'bot' member to yes in the 'is Bot' column. In the example below, Member 150 is set as a bot and all of the time records are eliminate from client costs and time.
After the changes have been saved, the column will look like the one below.
Administrative Cost Factor
When would the Administrative Cost Factor be applied to an engineer?
Some engineers are hired to be dedicated to client work even if all of their time entries are not for individual clients. For example, an engineer may work 70% of the time for individual clients, but the other 30% of the time the engineer manages other engineers that are doing client work. The 30% of time for management work is entered under the MSP, not for the individual clients. The 30% management time in the above example could be spent going to a client meeting, managing engineers who are working on clients or acting as a project manager. You want to attach their administrative time as COGS. To do this, MSPCFO zeros out the cost of the admin time and makes every hour allocated to client time. Every hour they work is more expensive for their individual clients. The client time is recorded on the P&L so now the administrative time is part of the COGS.
To accomplish the reassignment, two tables need to be changed in MSPCFO.
1. Lookup /Options/Time Logs
Set the Use Administrative Cost Factor to "Yes"
2. Lookup /Members
In the column titled 'Is Engineer', make the member 'is_engineer' = Yes. This means their administrative work is reassigned to the clients they work on. The costs for the engineer will be fully allocated to COGS. Cost for serving the clients is the full engineer cost.
The designation specifically defines a person that should have all of their costs allocated to clients, even though not all of their time is client-facing.
This setting should not be used for members with significant administrative or managerial duties. In general, less than 40% of the member's time should be administrative. If most time is admin or managerial, the few hours that is client facing would take on a very high cost.
In the example below, three members (154, 156, and 157) have been designated as "is Engineer"
After the settings are saved, the column will look like the one below for the three members.
Using an Admin Cost Factor
(This is only used when
Options/Time Logs/Admin Cost Factor = Yes)
The engineer has a monthly salary. For example:
Engineer monthly cost - $4,800
Total Hours - 160 per month
Cost per hour - (4,800/160) = $30/hour
The engineer logs hours to client work and to administrative work:
Client hours for a month - 120 hours @ $30/hour (hourly cost) = $3,600
Admin hours for a month - 40 hours @ $30/hour (hourly cost) = $1,200
Total $4,800
But when you hire a new engineer, you are really hiring them for the 120 client hours, so we want to apply the $4,800 only to client time. In MSPCFO we have developed the Admin Cost Factor to apply all of the engineer's cost to the client. We do this by zeroing out the Admin hourly cost and applying it to the client costs:
Client hours for a month - 120 hours @ $40/hour = $4,800
Admin hours for a month - 40 hours @ $0/hour = $0
Total $4,800
Note: This setting does not include lost time. It works best with salaried engineers.
Administrative Allocations
For line managers and dispatchers, MSPCFO would like to capture their costs even though most of their time is administrative and applied to your Internal client (usually your company), not to specific External clients. Since Internal Time is not normally included in the Client P&L, overall client profitability is overstated. For this type of member, MSPCFO can reallocate their time when looking at your overall Client P&L. The costs are not allocated to an individual client, but to your company as a whole. In this instance, all of the administrative time is applied across agreements, projects and TM, according to the settings in the table.
The last three columns of the Lookup/Members table provide the % breakdown of time allocation. Up to 100% of the person's time can be allocated, but all of their time does not have to be in the allocation ---- some can stay as administrative time.
In the example below, Member 148 has 100% of the time allocated to FFA (50%), Projects (25%) and TM (25%). Member 149 only has 75% of the time allocated to client costs (FFA (25%), Projects (25%), and TM (25%)) The remaining 25% will stay as administrative.
Any member that has been set up as "is Engineer" for the Administrative Cost Factor cannot be set up under Administrative Allocation.
After the settings are saved, the Admin Allocations will show the %
If you have made changes to any of the settings, click "Save Members" button at the bottom of the screen or click "Cancel" .
Recalculation of the data must be made for this option to be updated.
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