Audience - builders
Read time - five minutes
Article contents - text outlining rate use in Deputy with Buildxact
When looking to answer this question the biggest thing we need to consider is consistency of what we're trying to compare so that we get a good result.
Put simply if you're estimating a job with labor at a charge out rate of $75/hr, it's no use comparing that in the actuals costing section to a pay rate of $25/hr as we'll always tell you that you've made money which isn't accurate. The result we're looking for is the ability to flag difference in the quantity of labor.
There are secondary things to consider if you plug Deputy into your accounting system, but in our view this isn't the primary concern.
What rate did you estimate with?
Simply put you'll have done one of two things:
Used a charge out rate when estimating - MOST COMMON
Used a pay rate when estimating and added a markup to cover overheads/oncosts for the employee.
Charge out rate in the estimate
If you've used a charge out rate in your estimate, then you should use a charge out rate in Deputy.
Pay rate in the estimate
If you've used a pay rate in your estimate and added markup then you should use a pay rate in Deputy. This is because the markup will not be shown in the actual costings screen in Buildxact, meaning we're only using the original pay rate to compare with Deputy.
NOTE: this means that staff pay rates are visible in Buildxact, if this is a concern then we would recommend using charge out rates throughout.
Special note for cost plus jobs
If you're running a cost plus job and using Deputy for the timesheets, we would suggest you use the charge out rate in Deputy (which will in turn mean using charge out rates in your estimate).
This is so that when the Work Order is created in Buildxact and then goes to be billed to the customer, you don't have to adjust the markup to get from pay rate to charge out rate. In fact, depending on the agreement with the client, you may even use the charge out rate as is and have 0% markup on labor when being invoiced.
Note that if you need help knowing what markup to add we have a calculator HERE
What about my accounting?
The question comes up here as Deputy has the ability to push timesheets into accounting systems for the purpose of payroll.
There are a few considerations to be made here and the situation will be different depending on whether you have a pay rate or charge out rate in Deputy.
Should I connect Deputy to accounting?
Deputy will push through the exact number of timesheet hours into accounting. So, if your staff are on salary for 40hr/week for example, and your timesheets are for only the time they're on site, your accounting may receive only 34hours of timesheets if they have travelled between sites.
For this reason we don't push the connection between Deputy and accounting as a priority, which also gives you more flexibility around the rates you want to hold in Deputy.
Deputy holds a pay rate
If you do connect Deputy to your accounting and have a pay rate in Deputy (we've already mentioned in this article what this means for Buildxact) then the pay rate will go into accounting and hence no issue for payroll.
Deputy holds a charge out rate
If you do connect Deputy to your accounting and Deputy holds a charge out rate then the rate for payroll will be incorrect. The options for you here are either:
Don't connect to accounting
Connect to accounting and reach out to Deputy as there are options on the connection with accounting which involve being able to send only the quantity of hours and have the rate used in payroll be from accounting rather than Deputy which give more flexibility to the rate held in Deputy.
What do we suggest for new Deputy setups?
Keep in mind that everyone is different and there isn't a one size fits all.
That said, given that most users seem to estimate using charge out rates, we suggest charge out rates be used in Deputy. Additionally, we generally don't prioritize the connection between Deputy and accounting as the main problem to solve is around cost tracking your jobs and the connection between Buildxact. Deputy is all we need to solve that.