Remodeling | Accounting, Percent-Complete Accounting, Labor Burden, Operations: Many remodeling companies that employ their own in-house labor find a successful team of motivated and engaged craftsmen and women provide a significant advantage over companies that work with a primarily trade-based work force. One of the strongest arguments for in-house labor is the ability to better control schedules; another is the ability to develop a powerful team culture to provide an exceptional client experience. Develop this and the company can soar.
5 comments:
"Remember, the ESTIMATED labor rate should be very close to the ACTUAL labor rate in job costing to produce a reliable estimated to actual cost report AND to produce an accurate over/under billings job cost report. Both of these will be incorrect if your estimated labor rate is not close to actual" This is what struck me as being the most crucial aspect of the budgeting process. I have many little issues that I have grown in, throughout my process of budgeting people and labor more and more. This article goes to help stress the importance of needing an accurate account of what you think the labor should be and then comparing that to what it indeed was, in the end, all be all of the production. This helps to inform future corrections that can be made and then streamline the process in productions to come. There were also some great thoughts mentioned on how to account for other items such as benefits of workers for upper management that were great to know about.
This was a really helpful article as someone who really has not done enough budgeting of other people time in the past enough. Moving into events like rube and Arcade where it is essential to properly budget other people time accurately. To me I see the same thing as Jeremy in the article that the biggest issue would be going with the estimated and the actual rates. We sometimes think of an ideal number for project and what we think personally it will take or vice versa with an intricate or complicated aspect we will assume the worst possible and in our heads we will either get stuck to it or more likely only move a little more towards the actual so that we feel confident in ourselves. We sometimes forget this and unintentionally make our estimates different from the actual we need to make these as close as possible in order for the reports to be doing their job.
This article is very helpful in simply putting how the costs of employees adds up. I hadn’t previously realized all of the components that go into how much an employee costs. It’s also helpful that the article shows how to account for these aspects in Quickbooks or similar software. This is a good resource for people who want to start a business or figure out how to decrease unnecessary costs. Something that would have been interesting for the article to touch on would have been how to learn to estimate. Through trial and error may work, I would be interested to know if the author had a take on better and faster way to learn to estimate. In addition, the article focuses on the downsides on over underestimating time, but are their similar down sides to overestimating? Overall, this article gives an easy to understand introduction to how what goes into labor budgeting.
This article is extremely interesting as someone who is interested in the business side of theatre. One of the big talking points in this article was how much a person actually costs hourly. Just because they are getting paid 40 dollars an in hour does not mean they cost 40 dollars an hour. N reality they cost a lot more with benefits and such. In theatre this is very vital to understand. Most shows have limited budgets and because of that every salary needs to be looked at carefully. Paying an actor 1,000 a week could cost even more with paying unions and benefits. Im not even going to discuss theater overtime because that gets even more expensive. When creating budgets it is nectary to estimate really well as if you don’t the producer or theatre could end up losing a lot more money at your fault because you did not estimate enough of labor cost.
This article does a very interesting job in showing the importance of estimating the total burden of employing in house labor. The article states “the development of such systems which hire/train/manage and reward field employees is a costly and time-consuming endeavor. You need to hire the best, train and manage them well, and reward them at every step of the way. As all these costs relate to the work done in the field, they are part of the product your company sells. Thus, all these costs must be included in your estimate.” These other thoughts many ignore when thinking on the cost of using field teams, to the point that they may simply think of the cost of that labor to just be the hourly of that labor in fact the article suggests that it can be as high as 67% higher than their hourly. This makes sense to me when you think of the ost of training and management of said employees.
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