Use the Function groups form to classify your employees into rate groups, as each function group has a separate actual costing rate.
During preliminary costing, an average hourly rate is used to determine the labor costs. This is because, in the preliminary costing phase, you do not yet know who will actually be performing the work. The work might be done by a student on work placement, a trainee or an experienced person, all of whom have different hourly rates.
When the work is being carried out, the person performing the work will be known and the labor costs can be determined accurately. The program checks the function group of the employee concerned, and the rate specified in the function group will be used to determine the actual costs.
Function groups are also used to group employees in overviews.
You have full control of the way you organize function groups. Groups could be based on rates (work placement student, skilled workers) or the type of work (welders, management).
Note: When registering hours, also an hour code is specified (for example, 'Direct hours'). If an alternative labor rate has been entered for the hour code, the hour code rate will take precedence over the function group rate.