Maintenance Costs

Recording the labor and materials that are required to complete work orders is central to the maintenance management process. By posting the costs that are incurred from each work order, it becomes possible to see if certain assets have unusually high maintenance costs. This can influence decisions as to whether or not assets should be replaced.

You can record 3 types of maintenance cost:

• Labor entries are made for the work performed by your company's maintenance personnel. You use maintenance trade codes to indicate the different types of labor that are required for maintenance. A standard hourly cost is typically determined for each maintenance trade. Click here for information on how to post these entries.
• Material entries are made for the items that were used in maintenance activities. Materials can be classified as either stock or nonstock items. For more information on these material types, click here. Click here for information on how to post these entries.
• Contract entries are made for the work performed by an outside vendor. You use maintenance trade codes to indicate the different types of labor that can be contracted for maintenance work. A standard hourly cost is typically determined for each maintenance trade. You can also enter hourly costs for specific vendors. Click here for information on how to post these entries.

Maintenance Journals

You use maintenance journals to enter different types of maintenance costs, link these costs to a current work order, then post the costs to that work order. Three separate journals exist for labor, material, and contract costs. A fourth journal combines the functions of the other three journals. Costs that are posted from a maintenance journal are displayed on the corresponding FastTab of the associated work order.

Maintenance journal lines post to the maintenance ledger. Every asset has its own maintenance ledger, which you can use to view the recorded cost of any work orders for that asset.

Posting from a maintenance journal does not typically affect the general ledger. This is useful if you want to use the Maintenance Management application area solely as an analytical tool for recognizing trends in your company's maintenance activities, and would prefer to keep any accounting aspects separate.

The one instance in which posting from a maintenance journal does affect the general ledger is when you are recording the use of stock materials. Materials that you keep stocked in your inventory are set up as item records within the program. When you indicate that a quantity of a stock material is used in a maintenance journal, a negative adjustment is made to the item's on hand quantity. Because each unit of an item carries value, this negative adjustment has an impact on the associated general ledger accounts.

Internal labor costs can only be posted through a journal. The recording of labor entries is done purely for analytical purposes, since the financial impact of an employee is handled separately through payroll entries.

Purchase Documents

You can use purchase documents in lieu of maintenance journals to post material and contract costs. If you purchase items or hire an outside vendor to perform maintenance activities, you will be invoiced for these goods and services. You can associate a purchase line with a particular work order, then indicate whether the line is for stock material, nonstock material, or contract labor. When you post the purchase line, an entry is made to the maintenance ledger for the relevant asset.

Posting maintenance costs through purchase documents always results in entries to the general ledger. If the purchase line is for a stock item, you enter the item and quantity on the line. The posting groups that have been assigned to the item dictate which accounts will be impacted. Because the item has been used in a work order, the program will automatically adjust the item out of inventory immediately after it has been received.

Nonstock material and contract labor is posted directly to a general ledger account that you specify on the purchase line. If a work order has a default material or contract account, the account number will be assigned to the purchase line when the work order number is entered. If a work order does not have a default material or contract account, you must manually enter a G/L account on the purchase line. Click and here for more information on how to process these purchase documents.

Posting Grace Period

You will not always know the actual amount of a maintenance cost at the time a work order is completed. For example, if you hire a vendor to service a piece of equipment, it may not be until you receive the invoice a week later that you know the cost.

You can post maintenance costs to completed work orders by utilizing the posting grace period feature. After entering a date formula in the Posting Grace Period field on the maintenance setup card, you will be able to assign a completed work order to a maintenance journal or purchase line if it falls within the grace period. For example, if you define a posting grace period of one month, then enter a new maintenance journal line, you can assign any work orders that have been completed within the past month to that line.

The posting grace period is used solely to determine available work orders for which maintenance costs can be assigned. The posting date for the maintenance cost must still fall before the assigned work order's completion date. For example, if the work date is September 15, and we have a posting grace period of one month, we will be able to enter maintenance costs for a work order that was completed on September 1. However, the posting date for these costs must be no later than September 1.

Viewing posted costs

It is possible to view posted costs and other information through the Maintenance Ledger Entries. click here.