KBA-01305: Forecasting Labor Burden changes based on Labor Changes

Summary:

Spitfire BFA Forecasting includes the ability to automatically change the FAC/FTC amounts for Labor Burden based on corresponding FAC/FTC changes to Labor within the same cost code.  The automatic procedure works as long as there is only a single Labor account category (cost type) within any given cost code.

Setup and Prerequisites

In the Account Category tool on the System Admin Dashboard:

1. Labor account(s) must be set up as Type = Expense, Class = Labor.
2. Labor Burden account(s) must be set up as Type = Expense, Class = Labor Burden.  Sites integrated with Microsoft Dynamics SL use Labor class in DSL and change the class to Labor Burden in Spitfire.
3. All these accounts must be flagged (checked) in the Budget column.  In Microsoft Dynamics SL Budgeted = Yes and Budget Template = Yes

Note: if your site is integrated with Microsoft Dynamics SL, all Account Categories are maintained there.

Burden Ratio

When you create your original budget, include your labor and labor burden lines as needed.  Be sure you have only one labor account per cost code.  The original budget amounts establish a ratio of burden to labor.  This ratio is used during forecasting data entry calculations.
As the project proceeds, labor and labor burden posted to the Project will appear in BFA in the Actual columns on the corresponding rows. If the amount appearing in the Labor Actual+Committed column is greater than the amount appearing in the Labor Revised EAC column multiplied by the Threshold percent then the Labor Burden to Labor ratio will be adjusted to reflect the posted amounts.

Using Forecasting

1. Open the BFA workbook from a Forecast document.
2. Navigate to a Labor Account Category.
3. Using the Forecast Data Entry form, enter the FAC or FTC amount in the Change column.
4. Tab out of the text box.  This will cause the Forecast Calculation Engine (FCE) to display the results.  Note: the results DO NOT include any change to the Labor Burden accounts.
5. If the Labor change is acceptable, click the Apply button.  Your new amount is stored in the Labor Account Category row.  Using the ratio discussed above, the FCE will apply a portioned amount to each Labor Burden Account Category within the Cost Code.  Both the Labor and Labor Burden Account Category will be flagged as changed.

Clearing Applied Labor

• Labor burden changes can be cleared or altered independently from labor changes by using the Forecast Data Entry form.
• Clearing or changing Labor Account Category will automatically change the Labor Burden Account. Therefore if you elect to Clear Applied on the Labor Account Category then the labor burden will also be cleared.

Additional Comments:

This feature is an alternative for those sites that do not use fully burdened labor rates.  In general, Spitfire recommends using BHR.

KBA-01305; Last updated: October 13, 2016 at 9:50 am;