All posts by chris.vandersluis

Capitalization and why it matters to project management

If you work in the Finance department Cap-Ex and Op-Ex are terms that are often used to differentiate between capital expenses and operational expenses.  That can matter to a project manager when trying to find the correct type of funding for a project.  There is, however, an aspect to capital management that is much more significant for most high-tech organizations and that is the notion of capitalization of project work.

Ever since the Y2K period when we saw IT firms going public with balance sheets that would vary greatly from one firm to the next, the US Federal Government has made rules about how assets are calculated.  When an organization invests in an asset such as a piece of software they are developing or a process or equipment they are inventing, they can have a line-item on their balance sheet that refers to the item’s value as an asset and is likely called “Intellectual Property”.  The concept makes common sense.  Let’s say a high-tech company invents something like a piece of software.  The software has some intrinsic value so if you ever sold the company, the value of that software would have to be taken into account yet how do you determine the exact value?

Capitalization targets that exact question and if your firm is or is about to be publicly traded, the concept is even more important.

Years ago, when proposals were first made to the US Financial Accounting Standards Board (FASB) I was asked by Strategic Finance Magazine to write an article about how this would promote activity-based-costing for project managers.  I’ve written about what would become Sarbanes-Oxley several times since.

The Sarbanes-Oxley law says that you have to be able to account in an auditable fashion anything you put in your balance sheet.  The penalties for failure can be significant.  The law has teeth and the CFO’s of firms traded on US exchanges know it.

One way that follows “Generally Accepted Accounting Principles” (GAAP) of calculating the value of an asset is to define the actual cost of it.  That cost includes the labor of the inventors, the indirect costs of their work as well as any equipment and materials they needed.  If you know what people are being paid and you know what they work on, then this amount can be calculated.  But, that requires tracking activity-based-costing.  In the TimeControl world, this is one of the goals of many of our clients.

This may sound similar to Research and Development Tax credits that we’ve written about on the TimeControl site often.  But the rules are somewhat different.  R&D tax claims are designed to promote companies and employees in the country to work on inventing new things.  Capitalization focuses on calculating the value of the thing created.

Here’s an example.

Let’s say we write some software and we pay the salaried staff in our own firm who are working here in our country $100,000 to invent it.  That $100,000 cost includes only those activities which are R&D eligible so inventing time, coding time, testing, even documentation.  But it doesn’t include marketing efforts, sales efforts or services such as technical support.  The $100,000 of costs can be applied to a research tax credit wherever it is available.  We can capitalize $100,000 of those costs and make the value of that software equal to the costs.  The timesheets that show the inventing, coding etc. tasks all count towards the capitalization of that project.

In TimeControl terms we configure the timesheet to code the tasks which are R&D eligible and then the staff by location and payment type to be able to report these amounts simply at any time.

Now, imagine we have a second similar project.  Our costs were also $100,000 but instead of using all of our internal staff, we outsourced half of the work to a contractor in another country.  We make both staff and contractors fill out our timesheets configured just as we did above.

But the results at the end of the year can be different.  The total that is capitalizable would still be $100,000 as that is the intellectual equity value that we’ve added to the company.  But, the Research Credits almost certainly don’t include the contractors from another country.  So if half the work was done outside the country then it’s entirely likely that our Research Credit is only $50,000.

For project managers and Finance Directors, we can often find conflict in being able to get to that auditable intellectual equity calculation for R&D or for Capitalization or both at the same time.  Finance is looking to accomplish what they need from their own tools and Project managers are just looking to finish projects as quickly as they can but when both parties collaborate, the benefits to the company can be significant.

Finance may find that just a payroll timesheet isn’t enough as they need the activity-level data.  Yet using a project-only timesheet such as Project Management might want isn’t enough because we need auditable results and those are always easiest when we are looking at 100% of time accounted for.

Using a multi-function timesheet like TimeControl makes this type of decision much easier.  It is common for TimeControl to be configured to achieve multiple corporate goals at once.  TimeControl’s extensive rate functionality is able to track multiple rate values simultaneously so for the same hour of work, we are able to calculate a billing cost, an actual or payroll cost, an average project cost or other cost types.  This allows us to use one of these many rate values to track the actual cost to us for capitalization.  Next we need to make sure we are only calculating those capitalization tasks that are eligible.

The TimeControl task lists that might start in a project management system can arrive into TimeControl with Capitalization codes already established or they can be added by Finance after the tasks enter TimeControl.

The coding for staff as contractor vs. employee or country-of-origin can also be coded directly in HR or added to TimeControl later.

The beauty of the system is that end users don’t have to care.  This kind of background coding and decision making between Finance and Project Management allows the timesheet process to continue unimpeded and results in different parts of the organization getting the detailed financial or project information they need when they need it.

For organizations already using TimeControl for other purposes such as project tracking or HR or payroll, configuring the system for an additional purpose takes very little effort.  For those who haven’t yet started using TimeControl, adding the tracking of capitalization just becomes part of the basic configuration when the system is deployed.

There are processes to create and follow of course.  There will need to be someone in Finance who is responsible for following and reviewing the Capitalization data and reports that come out of TimeControl.  In addition, there will probably need to be some level of communication between Finance and Project Management to make sure that both parties understand what defines a capitalizable task or not.  But that kind of additional communication is probably a healthy addition to your regular process.

The advantage of using a multi-function timesheet like TimeControl is that a) different parties such as project management or Finance don’t have to compromise and not get the data they need and; b) end users don’t have to start filling out more than one timesheet.

Talk to HMS if you are interested in using TimeControl for capitalization, R&D tax credits and project management tracking as well as all the other aspects of timesheet collection that can be managed by TimeControl from the same system at the same time.

 

 

Managing Banked Time in TimeControl

banked_vacationMany organizations start using TimeControl because of its tremendous power as a project tracking tool.  But, TimeControl has been designed from its inception to serve many purposes at once.  For HR departments, one of the areas of functionality that is often asked about is how TimeControl manages “banked time”.

“How much time is in my vacation bank?” is a common question for many of us.  TimeControl can tell how much time is left in the vacation bank as well as how much time was earned, how much time was taken and audit that information for each transaction.  But the Banks functionality of TimeControl goes quite a bit further.  For those who much track not only project time, but also time spent on non-project tasks, TimeControl includes a number of abilities that will be of interest.

Bank values in employee table

The results of transactions for Banks end up in the Banks Tab of the Employee Table.  This area of the product is typically viewed and managed by someone from the HR department though there are many ways this element of TimeControl would be of interest to others.  At first glance, it is apparent that there are a total of twenty different Banks available by default for each employee.  When delivered, TimeControl includes banks for Vacation, Sick Leave and Personal Time off but these banks can be re-named and re-purposed to leave many different places that banked time can be stored and spent.  For some organizations, they will want to store banked overtime in one of the banks.  Other organizations will want to see how much training time was banked or certain kinds of training like safety training for each person.  There may be requirements for each employee to spend a certain amount of time on these kinds of activities.

In each bank, there is the concept of Starting Balance, Amount Earned, Amount Spent and Ending Balance or Amount Remaining.  For smaller organizations, the banks can be set manually with amounts per year input for each person.  For other organizations, the banks can gradually earn time in the banks through several methods.  The TimeControl Accrual module can help earn time into areas like Vacation or Sick Leave by calculating either just on time-served or by calculating the amount of time in each timesheet and then placing that new time earned into the proper bank.  For some organizations, they might already do those calculations externally, perhaps in the Payroll system.  For those organizations, simply importing the new values is most effective.  Regardless of how new entries into the bank are created, TimeControl creates an audit trail of them which is visible in the Employee Banks Report.

When an employee takes time in their timesheet, the charge code they use can be flagged as time that is counted against one of the banks.  This configuration is visible in the Charge Table screen.  For example, a Vacation Charge, would typically be flagged against the Vacation Bank.  This means that any time that is posted against that charge code, will remove time from that bank.  This flexibility also allows you to create other types of charges such as “remove time from my overtime bank” or to use vacation time from any other bank that you’ve created.

Employee Banks Report in Report Menu

This dynamic view looks at the banks records from the audit trail of time entered and time taken in each bank for each person.  The view is hierarchical to keep it uncluttered but you can quickly find the employee that is of interest to you and then display all details for all banks for that person including each hour put in and each our taken out of any bank.  This view is one of the most popular with HR personnel.

Employee Banks Detail Report in Report List

The Employee Banks Detail Report in the Report List gives a more static printable view of the details of each employees transacations in each bank.  Just like all other TimeControl reports, this report can be scheduled to be emailed to certain people based on changing conditions and the report’s results can be saved in Excel, CSV, Word, or image formats.

Accruals earns values into banks

TimeControl’s Accrual Module allows you to create earning formulas in four different ways.  Each formula can focus its earning rules to work for only certain employees or only certain employees under certain conditions.  There is no limit to the total number of accrual rules created.  The four methods are:

  • Calendar Accrual Based on Static Values
    This method is designed for a set number of hours to be posted in a bank based on just the passage of time. For example, 1.25 vacation days are earned each month.
  • Calendar Accrual Based on Posted Time Values
    This method depends on the values within the timesheet that is being posted. This might be more appropriate for a wage employee who earns a certain amount of vacation time for every certain number of hours they’ve worked.
  • Calendar Accrual Based on Rates Codes
    This method is designed to be activated when certain Rate Codes are used. For example, using an Overtime Rate banks 1.5 times the hours into a Banked Overtime Bank.
  • Timesheet Accrual based on Timesheet Hours
    This method looks at the total number of hours in the timesheet. It would be an excellent choice to tackle a rule where any hours over 40 per week is banked at 1.5 times into a Banked Overtime Bank and any hours over 60 per week are banked at 2 times the hours into the Banked Overtime Bank.

The Accrual Rules follow the TimeControl philosophy of being tremendously flexible and there can be rules for some groups that are different from others.

End of year procedures

At the end of each year, most HR departments do a review of the status of bank values and make sure that any adjustments are made at that time.  TimeControl banks can be configured to zero themselves at the end of your fiscal year or to just keep running year after year.  Some banks will be better with one configuration, others not.

Validation Rules

All other elements of TimeControl are “bank-aware” so if you need to make Validation Rule Warnings or Errors or Workflow emails, all of this can be done while using the values in the banks.  For example, you might make a Validation Rule that says that employees cannot book more time on vacation than they have in their vacation bank.  Or, perhaps you have a rule that says that employees can use up to one week of next year’s vacation in advance.

All of this and much, much more is possible with TimeControl’s banks functionality.  For more information on getting the most out of TimeControl’s Banked Time functionality, consult your TimeControl account manager at info@hms.ca.

I’ll be on the Peggy Smedley Show later today

I’m delighted to have the chance to talk to Peggy Smedley later today on her radio show.  The Peggy Smedley Show has been a source of expertise in the world of digital transformation.  At 1:40pm Eastern Time, Peggy and I will be discussing the impact of voice-assisted systems on construction and industrial software such as the recent announcement we made of our partnership with EasyVoice and how being able to enter information into TimeControl by voice alone can make a big impact on efficiency.  You can find out more about the TimeControl/EasyVoice link at: TimeControl.com/use-cases/easyvoice.

You can listen to the broadcast yourself by going to the Peggy Smedley Show website at: https://peggysmedleyshow.com/.

 

Have you seen the latest letter sent to us from Sinope?

We are always delighted to get input from our clients. This month brings us a lovely letter from Sinope Tech. It’s especially exciting for us as it comes to us from a client in Quebec, Canada in the same province where HMS Headquarters is located. Sinope is a manufacturing company specializing in innovative smart home products.

Cassandra from Accounting at Sinope explains in her letter that their team is using TimeControl for employees to track project and non-project hours and this allows Sinope to use reports from TimeControl for Research and Development Tax Credits.

Cassandra is also highly complimentary about our services:

TimeControl also offers an exceptional support service! Quick and clear answers are always given to us.

We’re delighted to be working with Sinope and proud to be a part of their project control environment.

You can read Cassandra’s letter at: TimeControl.com/why-timecontrol/testimonials/sinope.

De-centralized Project Management and Centralized Timesheets with TimeControl

wp_decentralized_centralized_300x383The most common notion of Enterprise Project Management (EPM) systems means that all users access a single centralized system for all related functions.  This concept became popular in the late 1990s with the rise of ERP systems.  Project Managers have been asked to store their data and adopt the centralized project management system.

Yet there are still millions and millions of individually run project management tools running on desktops or even as services in the cloud but not part of a centralized project management process.

That might be fine for each project manager but when it comes to a process that needs to be centralized like timesheets, we run into a bigger problem.  The result is that one aspect of the enterprise such as Finance insists on a timesheet for payroll for all personnel.  Another department insists on a timesheet for all users for HR to track time off and another department needs a billing timesheet for all users who contribute to billing time.  Each project manager might need to deploy their own timesheet system for their teams.

It can become chaos in a hurry.

We’ve just released a white paper that deals with this exact business challenge.  It’s called “De-centralized Project Management and Centralized Timesheets with TimeControl”.  It’s free to access and it’s available right now as part of our ongoing efforts to show how to realize the benefits of TimeControl. If you are interested in having project managers continue to use multiple systems but need to have one timesheet to bring all the actuals together for different purposes, you’ll find this paper of interest.  The white paper can be downloaded from: https://www.timecontrol.com/pdf/whitepapers/centralized_decentralized.pdf.

For more free resources on enterprise project management and enterprise timesheet systems, go to: TimeControl.com/resources.

TimeControl timesheets and Primavera project management make a winning combination

TimeControl and Primavera have a long history together.  First paired in 1997, HMS Software has ensured it’s TimeControl has had a continuous link to every version of Primavera since.  For those users who need a Primavera Timesheet that supports both financial and project processes simultaneously there is no better selection.

TimeControl includes links using direct database-to-database connections for Primavera Professional and Primavera EPPM and a Web connection link for Primavera EPPM so all the basis are covered whether Primavera and TimeControl are in the cloud or on premise.  The bi-directional link moves projects, tasks, resources assignments and progress to TimeControl then sends back hours, costs and progress.

Primavera clients who need a single timesheet to update not only the task progress in Primavera but also Payroll, Billing, Finance, Job Costing or HR use TimeControl to provide multi-purpose timesheet functionality that will allow a single point of timesheet entry and multiple corporate uses at the same time.

Some of the benefits of integrating TimeControl as your Primavera Timesheet include:

  • Automated Business Validation Rules
  • Expense tracking
  • Extensive Rate Management with unlimited rates per person and multiple values per rate
  • Management of Vacation, Sick Leave, Personal time banks
  • Crew Timesheets (with TimeControl Industrial)
  • Material consumption, Equipment usage and Production accomplished (with TimeControl Industrial)
  • Management of Banked Overtime
  • Included integration with Oracle-Primavera Pro, EPPM and many other project systems
  • The free TimeControl Mobile App for tablets and smartphones
  • Missing timesheet management
  • Multi-lingual interface
  • The Matrix Approval Process for Labor Actuals™

TimeControl is available as a subscription in the cloud or for on-premise deployment or.

HMS has a free information portal with white papers, video lessons, slide presentations and factsheets on our website at: http://primavera.timecontrol.com.

 

Keppel FloaTEC sends a strong recommendation for TimeControl

Just in time for the holidays we can share yet another great reference from one of our TimeControl clients.  Keppel FloaTEC is a leading provider of engineering services and solutions for deep water floating production systems.  They are a long-standing client of TimeControl with over 13 years of experience with the system.

TK Das, the President of Keppel FloaTEC penned a great recommendation for TimeControl which he has graciously allowed us to publish on the TimeControl website.

“Our labor records are subject to audit by our customers,” TK explains.  “We have been able to satisfy our customer requirements using this system and most of our customers are major oil companies around the world.”

That’s high praise indeed.

We thank TK and the entire team at Keppel FloaTEC for our long standing relationship and for this great recommendation.  We look forward to serving his team for years to come.

You can read TK’s letter in its entirety at: https://www.timecontrol.com/why-timecontrol/testimonials/floatec.

US Properties increases efficiency with TimeControl

We are delighted to have received a letter from US Properties about their use of TimeControl. US Properties is the leading commercial real estate brokerage and property management firm in Eastern Connecticut.

Erik Mills, US Properties’ Vice President of Operations penned a letter to us recently explaining how the deployment of TimeControl has allowed the company to improve efficiency to be able to grow without increasing its staff.

“We strongly recommend the system for its ease of use and customization but more importantly the invaluable tech employees who are readily available to assist,” said Mills.

Here at HMS, these letters are a huge motivator for our group so we thank Erik and the whole US Properties team for their support and their letter.

You can read the letter in its entirety at:
TimeControl.com/why-timecontrol/testimonials/usproperties.

TimeControl joins the Internet of Things (IoT) with voice command

TimeControl has taken a leap forward to join the Internet of Things (IoT) thanks to a new Alexa skill released by EasyVoice. Over the last few months, HMS has worked with EasyVoice to help the new Alexa skills understand how to interact with TimeControl and it is now available.

Now you can say things like “Alexa, add two hours on my timesheet to my meetings task for today” or “Alexa, how much time have I booked to meetings this week?”.  The new skill allows users who are in situations where using their desktop or mobile interfaces is challenging, such as when they are driving.

To see the new EasyVoice skill in operation, go to our solutions page at: TimeControl.com/use-cases/easyvoice.

You can subscribe to EasyVoice’s Alexa skill and even get a free trial of the skill at: Voice-Time.com/giveaways.

Which browser is best with TimeControl 8?

We have had numerous questions about the performance of different browsers with TimeControl. With the release of TimeControl 8, these question have expanded to which version of TimeControl is faster, version 7 or version 8 and which browser performs better.

The HMS Technical department devoted some time to benchmarking the answer to these questions and we’re happy to share the data with you.  We tested 80 different TimeControl functions in TimeControl 7.4.1 using Internet Explorer (the most popular browser used with TimeControl when TimeControl 7 was first released) and in TimeControl 8.0 using Microsoft Edge, Firefox, Chrome and Internet Explorer  (yes, Explorer is still part of Windows 10).   When we were done with our findings we were delighted with most of the results.

TimeControl 8 is, on average 33% faster than TimeControl 7.4.1.

The fastest browser when using TimeControl 8 was Chrome.

We were a little surprised at the poor performance of Internet Explorer.  So, in TimeControl 8.0.0.12 we included some IE-specific performance improvements which boosted the IE performance by a whopping 62% over earlier 8.0 builds and we’re delighted with that.

For those who love the raw details, we’ve included the entire study here: TC80_Benchmarks.