A 401(k) plan is a retirement plan that qualifies for certain tax benefits under Section 401(k) of the Internal Revenue Code. Once approved by the IRS, the plan allows employees to contribute a portion of their pay before taxes to a retirement trust. The earnings on the invested contributions in the trust are tax deferred until the funds are withdrawn, such as upon an employee's retirement or other designated condition. An employer may also make contributions to a retirement trust on behalf of employees. Employer contributions to the trust are not taxable to employees at the time of contribution. For additional information about 401(k) plans, consult with your Certified Public Accountant.
The financial category where an account appears in your financial reports. Examples of account types are Current Asset, Current Liability, Expense, and Income.
Stands for Automated Clearing House. ACH is a nationwide batch-oriented, electronic funds transfer system governed by NACHA (the Electronic Payments Association) operating rules, which provide for the interbank clearing of electronic payments for participating depository financial institutions. The Federal Reserve and Electronic Payments Network act as ACH Operators, central clearing facilities through which financial institutions transmit or receive entries.
The person at your firm who maintains the health of your project and financial information in Ajera. After Ajera is installed, the Ajera Administrator sets up Ajera to align with your accounting and project management workflow.
A comprehensive record of all changes and edits made to an entry.
A journal entry consisting of two entries. The first is made in the current accounting period to ensure that accrued revenues and expenses are recorded correctly on financial statements. The second is made with a future date that reverses the effects of the first entry, to prevent duplication when the actual revenues and expenses are entered. Firms often use auto-reversing journal entries at the end and beginning of accounting periods, such as month-end or year-end, to get an accurate view of their monthly or yearly financial status.
The average number of days it takes to collect receivables from your clients from the time of billing to the time the payment is received.
The dollar value of anticipated revenues from projects contracted but as yet unearned (for example, the work is contracted but not performed). Backlog is reduced by the value of revenue billed and increased by the value of new contracts acquired in a period. Monitoring backlog trends can provide advance notice of staffing surpluses or shortages.
The phase of a project that will be billed to the client. The billing may be based on Time & Expense, Fixed Fee, Percent Complete, Unit Price, or Percent of Construction Cost.
A project that will be billed to the client. The billing may be based on Time & Expense, Fixed Fee, Percent Complete, Unit Price, or Percent of Construction Cost.
When a billing rate is determined as a multiple of cost, this is the cost rate that is multiplied to calculate the billing rate.
A grouping of phases within a project used to summarize or subtotal those phases on a client invoice and on project reports.
An increase to the cost amount to reflect direct personnel expense (DPE), overhead, and/or profit. It is used in billing rate tables to calculate the billing rate by multiplying the cost times up to five markups for labor and three markups each for expenses and consultants. See also: cost markup.
The rate used to bill a client for work or expenses incurred on a project. Ajera determines the billing rate from the billing rate table.
The total indirect expenses divided by direct labor. Indirect expenses include indirect labor in addition to all other general administrative expenses, such as payroll taxes, benefits, and utilities.
A form issued by a state to establish that you are not subject to state income tax withholding because you are not a resident of the state and only work there.
The amount deducted from a client invoice because a maximum was exceeded or because employee time or the project expenses could not be billed in full. An amount may also be written off after the final invoices have been issued because of nonpayment.
The amount negotiated to be invoiced for services performed on a project. This amount may include expenses and consultant fees, as well as labor.
The percentage of net service revenue remaining after all direct project costs (including direct labor and other direct costs) have been covered.
A control account is an account that primarily contains totals of one or more types of transactions, the detail of which appears in subsidiary ledgers. Control accounts are Cash, Accounts Receivable, Work-in-Progress, Accounts Payable (AP), Salaries Payable, and Client Prepayment accounts. You must verify that the total of the detail you entered is the same as the amount on your Trial Balance report. Through normal workflow, Ajera keeps the subsidiary ledgers and control accounts in balance. For example, when you print vendor checks, there is an entry to the AP control account to reduce the balance by the total of the check. However, if you entered the amount of the check as a debit to the AP account in Manage Journal Entries, your AP subsidiary ledger (Vendor Invoice Aging) would no longer be in balance with your AP account on your Trial Balance report.
The amount paid to employees for work performed, or the out-of-pocket costs to the company for expenses and consultants.
An increase to the cost amount to reflect direct personnel expense (DPE) and overhead. It is used for project reporting to calculate profit based on the real cost of the project. See also: billing markup, if you are using overhead to determine billing rates.
The rate that reflects the actual cost without overhead or profit. For labor, it is the per hour rate paid to an employee. For salaried employees, it is the salary divided by the number of standard hours in the pay period. For hourly employees, it is the regular pay rate. For expenses, it is the rate per unit for expenses, such as mileage and copies.
Credit memos reduce or write off outstanding client balances.
The current assets divided by current liabilities.
The billing cutoff date used to control the labor and expenses that are included on a client invoice. Transactions later than this date are not included on the invoice but are assigned a deferred status and are included on a future invoice.
The total liability divided by owner's equity.
An initial setting or value that Ajera assigns automatically for you. It often remains in effect until you change it.
The dollar amount of wages and salaries directly charged to billable projects priced at raw labor cost (excluding fringe benefits or overhead). See also: indirect labor.
Like a paycheck stub, the direct deposit statement lists detailed pay information, including taxes withheld, deductions, and fringes.
The amount of payroll charged to billable project numbers divided by the total payroll. The industry average for the direct labor utilization rate is approximately 65%. The remaining 35% of payroll is spent for activities not identified with a client project, such as administration or marketing.
A client invoice printed for internal review. You can print draft invoices as many times as necessary before printing a final invoice.
A tax credit for certain people who have earned income under an amount established by the IRS. With in-house payroll in Ajera, you can set up eligible employees to receive an advance credit in their paychecks.
The net fee income divided by direct labor. Net fee income is the total income less all direct project expenses other than labor.
Electronic Funds Transfer. A transaction involving the movement of funds by non-paper means (electronically), usually through a payment system such as the Automated Clearing House network.
Stands for Employer Identification Number. EIN is also known as a federal tax identification number and is used to identify a business entity.
The classification of employees within an organization. It can by used for determining billing rates, setting billable targets, and sorting and subtotaling employee utilization on invoices and other reports.
An industry standard used to help track and manage time on an individual level. With Ajera, you can track employee productivity using the Employee Utilization report. The report contains each employee's billable and nonbillable hours and cost. Information appears based on how you classify your labor activities into billable and nonbillable categories.
Free from withholding of federal income tax. A person must meet certain income, tax liability, and dependency criteria. This does not exempt a person from other kinds of tax withholding, such as the Social Security tax.
Pay that does not meet criteria for taxable earnings. You set up exempt pays in the Pays window in company payroll by selecting the applicable check boxes in the Employee Tax Exempt and Employer Tax Exempt area. For example, if you want to exclude sick pay from state unemployment tax, you select the State Unemployment Employer Tax Exempt check box. For example: $1,000 (gross) - $100 (Exempt Pay) = $900 (Taxable and Subject-to)
Amount that taxpayers can claim for themselves, their spouses, and eligible dependents. There are two types of exemptions: personal and dependency. Each exemption reduces the income subject to tax. The exemption amount is a set amount that changes from year to year.
The percent chance of winning, as entered for the Business Development (BD) phase, multiplied by the proposed contract amount for the linked production phases. You link a production phase by selecting a BD phase in the Marketing Phase field on the General subtab of the Project Info tab of the Project Command Center.
The project or phase is contracted to bill for the value of the work performed, not for the actual time and expenses expended. These projects or phases are identified with a billing type of Fixed Fee, Percent Complete, Unit Price, or Percent of Construction Cost.
Federal Insurance Contributions Act (FICA) tax. Also known as the Social Security tax. Provides benefits for retired workers and their dependents, as well as for disabled workers and their dependents.
The outcome of a firm's marketing efforts for a potential project.
See: standard billing rate.
Employers use Form 940 to report the annual Federal Unemployment Tax Act (FUTA) tax. FUTA tax, together with state unemployment systems, provides for payments of unemployment compensation to workers who have lost their jobs. Most employers pay both federal and state unemployment taxes. Only the employer pays the FUTA tax.
Employer's Quarterly Federal Tax Return. Employers use Form 941 to report the following: payroll taxes for the quarter; current quarter's adjustments to Social Security and Medicare taxes for fractions of cents, sick pay, tips, and group-term life insurance; and previous quarters' adjustments to payroll taxes.
The employee completes Form W-4 so that the employer can withhold the correct federal income tax from the employee's pay.
This form, Request for Taxpayer Identification Number and Certification, is used by a U.S. person (including a resident alien) to give the correct Taxpayer Identification Number (TIN) to the person requesting it. Also, when applicable, this form is used to do the following: certify the TIN you are giving is correct (or you are waiting for a number to be issued), certify you are not subject to backup withholding, or claim exemption from backup withholding if you are an exempt payee.
Also known as a fringe benefit. A benefit paid to an employee in addition to regular pay compensation. Examples include a 401(k) match or employer-paid insurance.
Federal Unemployment Tax Act (FUTA) tax. FUTA tax, together with state unemployment systems, provides for payments of unemployment compensation to workers who have lost their jobs. Most employers pay both federal and state unemployment taxes. Only the employer pays FUTA tax.
General and Administrative costs. These costs are typically part of your overhead costs and can be redistributed relative to direct labor cost to reflect the total cost of the project.
A chart that depicts progress in relation to time, often used in planning and tracking a project. Also called a timeline.
The listing of entries for all accounts that appear on a company's financial reports. Often called GL.
Also called earnings. An employee's total pay.
See profit and loss statement.
The dollar amount of wages and salaries not charged to projects, including wages of administrative, technical, and professional
employees that are not billed to projects. It also includes all paid leave.
The reconciliation of accounts between companies in the same organization so that they balance to zero.
A detailed list of services rendered, expenses incurred, or work completed on an itemized bill sent to the client for prepayment.
A grouping of phases for a project so as to create multiple invoices for the project. You use invoice groups to invoice additional services separately or to invoice multiple clients for a project.
The person at your firm who installs and maintains the health of Ajera.
A debit or credit posted to an account. Together with its offsetting credit or debit, the pair (or group) of transactions comprise a journal entry. See also: journal entry.
A firm's pursuit of a client regarding work on a specific project.
The billing of a negotiated set fee amount normally to be billed at one time.
An increase to a cost by a specified percentage to reflect direct personnel expense (DPE), overhead, and/or profit. The types of markups are cost markup, billing markup, and premium markup.
A cap placed on the employee cost rate for calculating a billing rate when based on a multiple of cost.
The feature in Ajera that allows supervisors in the same chain of command to approve employee timesheets if the direct supervisor is absent
Electronic Payments Association. NACHA develops operating rules and business practices for the Automated Clearing House (ACH) Network and for electronic payments in the areas of Internet commerce, electronic bill and invoice presentment and payment (EBPP, EIPP), e-checks, financial electronic data interchange (EDI), international payments, and electronic benefits transfer (EBT).
New Business Development. A firm's general pursuit of clients so as to be considered in the selection process for future projects.
Also called net profit or net earnings. It is the difference between a company's gross profit and its total expenses. The net income is found at the bottom of the income statement and is often called "the bottom line" by business owners.
A company’s established connection with a state as defined by a physical presence in a state, such as an office or employee. States differ about the details.
Additional payroll items, such taxes or deductions, that are included in a payroll only when you specifically request them as a group. For example, if the payroll is biweekly and the insurance deduction should be taken once a month, then use the on-demand option for when that deduction should be included on the check.
A cost billed directly to the client on the invoice without any markups.
The type of compensation paid to employees. Examples include regular pay, overtime pay, vacation pay, and paid medical leave.
A component of a project’s work breakdown structure. A phase reflects a stage or task of a project’s lifecycle. You set up phases to help track costs and manage your client billing.
Paid Personal Leave. It includes paid time off (PTO) such as sick time and vacation.
The cost amount representing the increase to the employee's pay to reflect pay for hours entered as premium time (such as overtime and double time). For example, an employee’s pay rate is $20 per hour with a premium time markup of 50%. When 1 hour is entered as premium time, the cost for that hour is $30. Ajera tracks this cost as $20 as regular cost and $10 as premium cost.
An increase to the employee's pay rate to reflect pay for hours entered as premium time, such as overtime and double time.
Used to test the format of the direct deposit ASCII file for employees before making an actual direct deposit. The direct deposit prenote is set up, generated, and then sent to the bank. After your bank approves the direct deposit, you can begin generating actual deposits. Generating prenotes does not actually deposit money into a bank account.
Client cash received for services not yet performed or billed.
Deductions made from gross pay before deducting taxes. You set up pre-tax deductions on the Deductions window in company payroll by selecting the applicable check boxes in the Employee Tax Exempt and Employer Tax Exempt area. For example: $1,000 (gross) - $100 (401k deduction) = $900 (Taxable and Subject-to). The taxable amount is specific to each tax. Many states refer to taxable pay as gross pay.
The hourly wage, usual benefits and overtime, paid in the largest city in each county to the majority of workers, laborers, and mechanics. Prevailing wages are established by the Department of Labor and Industries for each trade and occupation employed in the performance of public work. They are established separately for each county and are reflective of local wage conditions.
Term used to differentiate a billable work-related phase from a phase that represents business development effort.
The percent applied to billable project costs to reflect the profit margin.
The graphical representation of a project's work breakdown structure, which appears on the lower left of the Project Command Center.
For situations where an employee lives in one state and works in another state, or works in several states, state governments often draft and implement a reciprocal agreement to determine where to withhold state taxes.
An identifier of a transaction for auditing and reporting purposes. Reference numbers and descriptions print on general ledger reports.
Personnel, expenses (such as a tool or supply), or any other item required to perform the work of a project. In Ajera, you identify a resource as labor, expense, or consultant.
Prior year profits of the company that have not been paid out to the owners as of the balance sheet date. The earnings are retained for use by the company. Retained earnings is an account in the Capital Section of the balance sheet. Retained earnings increases when there is a profit by the firm, and it decreases when there is a loss by the firm or when cash dividends are paid. Retained earnings also decreases when a corporation buys back common stock.
Referred to as a prepayment in Ajera. Client cash received for services not yet performed or billed.
Request for Proposal. Request for firms to supply relevant experience and detailed information (such as a fee proposal, schedule, scope of work, project approach, team member resumes, and consultants) for the delivery of the project. A project owner sends an RFP to a shortlist of qualified firms. The RFP can be the first step in the selection process, or it can follow the RFQ. This stage most often has a firm due date associated with it.
Request for Qualifications. Often a first step in a formal selection process where a client requests information about a firm's general qualifications to perform work on a potential project. It typically does not list the scope of work or request a fee proposal, fees, or proposed project team information. Firms often respond to RFQs with standard brochure-type materials. This stage most often has a firm due date associated with it.
Reported Percent Complete. The amount of a project or phase that is complete as reported on a specific date in the project lifecycle.
Compensation received by an employee for services performed. A salary is a fixed sum paid for a specific period of time worked, such as weekly or monthly.
Session journals are reports showing entries created, changed, and deleted in a session. They also show a recap of accounts affected by the entries.
The process of splitting units or amounts (when using Manage Client Invoices in Ajera) to include part of the billing item on the current invoice and the remainder on a later invoice.
A particular step in the process a firm follows regarding their business development efforts toward potential projects.
Also called flat rate. A set rate, with no markups, used to bill the client for services performed or goods delivered.
The hourly rate for salaried employees calculated as (salary/number of hours in the pay period).
Often a short document, brochure, or pamphlet that highlights the capabilities of a firm. It may also focus on a firm's expertise in a particular market segment. These are often used in campaigns for the purpose of generating RFQs and RFPs.
Taxable earnings up to the wage limit, if any. You set up subject-to earnings on the Taxes window in company payroll. The subject-to amount is specific to each tax. For example: employee's salary is $5,000 per month and the federal unemployment wage limit is $7,000. On the first paycheck: Federal Unemployment Taxable = $5,000 and Federal Unemployment Subject-to = $5,000. On the second paycheck: Federal Unemployment Taxable = $5,000 and Federal Unemployment Subject-to = $2,000.
A paycheck issued in addition to a regular paycheck. An example is a bonus check. Ajera uses federal supplemental pay schedules to calculate withholding on supplemental pay.
Backup information that provides more detail for the amounts on client invoices. You can print it and print timesheets for time applied to the client invoice. You can print it for draft and final client invoices. On draft invoices, it has a title of Pre-Billing Worksheet (unless you change it in the invoice format used by the client invoice). It prints on a separate page at the end of the invoice.
A part of a person's income on which no tax is imposed.
Earnings subject to federal, state, or any local taxes. Taxable earnings = Total pay - (Exempt pays + Pre-tax deductions).
Gross pay minus any exempt pays and deductions.
A debit or credit posted to an account. Together with its offsetting debit or credit, the pair (or group) of transactions comprise
a journal entry. See also: journal entry.
A measurable item associated with a cost entry. Examples include labor hours, blueprints, and mileage.
The amount per unit that your company bills for a given expense item.
The amount per unit that it costs your company for a given expense item.
The percentage of total raw staff labor (in dollars) charged to projects. Also known as chargeability.
Defines employee time as direct or indirect, such as direct, sick, vacation, or marketing.
Compensation received by employees for services performed. Usually, wages are computed by multiplying an hourly pay rate by the number of hours worked.
A representation of information in the Ajera database in either a table or chart form. A widget is an interactive building block that you use to create a dashboard.
Money that employers withhold from employee paychecks. This money is deposited for the government. (It will be credited against the employees' tax liability when they file their returns.) Employers withhold money for federal income taxes, Social Security taxes, and state and local income taxes in some states and localities.
A hierarchical (from general to specific) tree structure of deliverables and tasks that are performed to complete a project. It is used in project management to document the scope of a project and serve as a basis for project planning. In Ajera, your work breakdown structure is represented in the project tree on the lower left of the Project Command Center.
An employer-paid form of insurance that provides compensation for employees who are injured in the course of employment. Rates for the insurance tax can be different based on occupation.
Transaction entries that Ajera creates for fee-based client invoicing. You can view these entries by clicking the Entries button while working on a fee-based client invoice.