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Direct personnel expense (DPE) consists of taxes and fringe benefits paid on behalf of employees. DPE includes benefits such as insurance, taxes, and 401(k) matches.
You can use a DPE markup to reflect these additional costs on project reports. You can use a DPE markup on your billing rate table to mark up cost for invoicing.
With Ajera, you can track your DPE separately from your general overhead expenses when reporting project cost.
Overhead is the percent applied to project labor costs to reflect general operating expenses. The use of overhead provides a more accurate picture of the profit on projects. Overhead includes expenses such as indirect labor, rent, and utilities.
You can choose to include overhead in cost amounts for your project reporting. When producing the Executive Summary, Project Earnings, Project Profit, or Budget Variance report, click (Customize) and select the Include overhead in cost check box.
Ajera offers three methods to distribute DPE and overhead costs:
All three methods use fixed percentages, but the cost- and hours-based methods use them only temporarily, replacing them with more precise values later.
Fixed percentages only
Fixed percentages are your best estimates of your firm's DPE and overhead percentages. This method produces a more uniform calculation of DPE and overhead costs on your project reports because it is unaffected by direct labor costs or hours.
Based on costs or hours
The cost- and hours-based methods are more precise because they calculate DPE and overhead costs based on direct labor costs or hours from your Expense and Other Income accounts.
Because your costs and hours vary over time, Ajera temporarily uses fixed percentages to represent DPE and overhead costs on project reports. It replaces the fixed-percentage amounts with the cost- or hours-based amounts after you distribute DPE/overhead costs.
Overview of DPE/overhead process
To set up and distribute DPE/overhead costs:
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