How Should You Assign Time Against Your Projects?

Posted by Adrian Anastas, Consulting Manager - Vision UK on February 6, 2014

assign time against projects

This is a question that often comes up in many of my ERP implementations, and is usually driven from the operations or accounting function. In fact, the Operations Director at my latest implementation asked just this question:

“I want to recognise when all of my staff are working on projects - particularly when they’re working long hours - But for things like travel time, or admin staff, I don’t want to penalise the project. How should I assign the time against the project?"

This particular client explained that when they had a project that was out of their usual region it could be difficult to properly assess utilisation against the project. If the team working these projects put down the 6 hours a day they spent driving there and back, then project looked like a failure, but if they didn’t, it looked like their utilisation numbers were below par.

If you’re an operations director, how should you manage situations like this?

The issue raises a number of fundamental questions:

  1. Should staff be using their timesheet to allocate their contracted hours across the projects they’ve worked on, or should they record the actual hours they’ve worked? 

  2. What cost does every hour on a project have? Is it the same for all hours? What about travel time?

This is where having an ERP system with a project control module can help. In my opinion we always want to record what actually happened, not what “should” have happened. So the answer to question 1 is always - record the hours they’ve actually spent working. I can just hear the Financial Directors out there clearing their throats to start giving out to you about how if you record 50 hours in a week, but my hourly cost rate is based on a 40 hour week, then I’m over-costing on projects. My response to that is - so you should! That’s a basic concept of standard costing. If you were to assign additional resources, so that your staff are not overworked, then the project would still attract 50 hours of cost to achieve the same work.

Then comes the question of travel time. The team are not actually working on delivering the project while they are travelling, so to cost travel at the standard rate would mean that this project always looks worse than it is. Here, I think the solution depends on what you want to achieve. In my opinion, travel is a genuine cost of running that job, so I would want those hours allocated to the job. If the travel is after hours, for instance if the team was working full days, and travelling every day, I could argue there is no real cost. In that case, so that the team still get credit for the time but no cost, or a reduced cost, is attributed to the project, I would set up an additional phase or task just for travel time.

In Deltek’s Vision ERP system I can set a cost rate table for each different Phase or Task, so I could assign travel to the “Travel” cost rate table.

And that is how I would answer the second question - It depends on what you want to see. I always hold to the basic tenant that for staff, any timesheet system is just a way to allocate their payroll cost across the work that they’ve done.