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Payroll
How does DBA interact with payroll?
DBA includes its own job labor tracking system that has no connection with payroll other than the ability to compare absorbed job labor cost in DBA with direct labor payroll cost.
Labor hours entry is optional and tracked by worker. A worker can be a direct labor employee or a contract worker. The worker table is simple and consists of a worker number, name, and pay rates.
Labor is charged to your jobs at either worker pay rates or work center average rates, based on actual or estimated labor hours. Job labor cost is a credit balance that is offset on the income statement by direct labor payroll cost, which is a debit balance. Net labor expense is a "wash" at this point.
When finished items are received from jobs to stock (for shipment or issuing to other jobs), the job labor cost has been "absorbed" into the cost of the item and is now part of your inventory cost. When you sell the item, the labor expense finally gets realized on the income statement in the form of cost of goods sold.
Your job labor can be costed on an actual or estimated basis.
If actual labor costing is your objective and you cost jobs at worker pay rates and carefully account for all labor hours, your absorbed job labor cost will match your direct labor payroll cost and offset each other on the books with little or no variance.
If estimated labor costing is your objective and you use work center rates and/or estimated labor hours, you will have a variance between absorbed job labor cost and direct labor payroll cost, which is normal and expected and automatically handled by DBA's accounting system.
You can get your absorbed job labor cost total for any date range from the Job Transactions report, which can be compared to your direct labor payroll cost.