SAP Business One: Ultimate job costing system for engineering services

Post By Charlie Heywood on October 23, 2015

SAP Business One: Ultimate job costing system for engineering services

How to achieve better job costing for engineering services with SAP B1

Engineering services companies need a robust and efficient job costing tool. Too often, their existing software is incapable of meeting this requirement. They rely on a combination of accountancy software, project management applications and spreadsheets that don’t share data with each other, and therefore cannot provide the visibility needed to cost jobs accurately. For these businesses, being able to monitor the profitability of each project as it progresses can seem like a distant dream. But it doesn’t have to be…

The promise of ERP

Many companies seeking a technical solution to this problem arrive at ERP before long. After all, ERP is the software category that pledges to automate and integrate all the critical functions of an organisation to provide increased control and visibility.

SAP Business One is a leading ERP solution for small and medium-sized businesses. It offers a comprehensive range of 13 core modules to cover the typical functions of any business, but SAP also recognises that one platform cannot serve every type of business completely. There are unique processes and industry-specific requirements that some companies simply do not need and others can’t live without.

Job costing

Job costing is one of those processes – and this is where SAP Business One add-ons come in. Add-ons like the job costing solution from Enprise extend the functionality of SAP B1 to meet specific business demands while remaining tightly embedded with the core software. The result is a solution based on an industry-leading platform, but with the flexibility to deliver against the unique demands of an industry like engineering services.

A story like Beta Group‘s reveals the importance of the job costing add-on in certain industries. The company is an engineering service and maintenance specialist in the HVAC industry.

Back in 2011, managing director Martin Lewis told Computing.co.uk that the firm had initially found using SAP B1 “very complex”. The main reason for this difficulty was that the company lacked the in-house IT capability to modify the system in a way that would provide what it regarded as missing functionality. One of the main functions the business required, but did not get from the off-the-shelf version of SAP Business One, was job costing.

Lewis also told Computing that he believes SAP B1 is “probably the best [ERP solution] in the field” and said some of the problems were caused by insufficient research by his company during the selection process. However, the job costing problem could have been avoided altogether if Beta Group had chosen to deploy SAP B1 with an integrated job costing add-on.

Extended functionality

SAP Business One contains ‘project code’ functionality that allows transactions (sales and purchasing) to be grouped together. When a project is complete, a simple profit and loss can be obtained from the system by using the project code to calculate overall profitability.

However, project codes do not provide a detailed breakdown and analysis of time spent by staff, resource costs, material costs and expenses on each job. The system is therefore perfect for product manufacturers but less effective for companies that provide a service, where a number of different variable costs are involved in each job.

The job costing solution from Enprise solves this problem by making detailed cost information available in real-time, while extending the functionality of SAP B1 in several other ways that make projects easier to manage – including automated invoices and web timesheets (see below for more details).

Despite the additional features, the add-on itself is almost invisible to the end user. Once it is implemented, they can simply log into SAP B1 and choose additional options (such as time entry) from the main menu.

The job costing functionality includes:

Web timesheets

Capture employee time and business-related expenses quickly and efficiently with web timesheets. Approval procedures are built into the online timesheet entry system, which means your managers can review and approve all timesheets before they are submitted against a particular project.

Purchase requisitions

The purchase requisitions module uses the SAP Business One user interface to provide a familiar, user-friendly requesting system that includes the capability to request quotes from suppliers before committing to an order, as well as ensuring that employees do not create purchase orders without review/approval from senior management.

Recurring invoices

The recurring invoicing system makes it easy to bill customers a fixed amount for a service they receive on a regular basis – a huge benefit for engineering companies that provide contract services. Complete invoice history is recorded for all customers and made easily accessible for reporting. The user is provided with a list of all invoices due for creation, which can then be completed with a single click.