Financial reports help businesses see how they're doing and make better decisions. In this series, each article will explain a specific report, covering what it is, why a CPA needs it, how the numbers are calculated, and a simple example to show how it works. Whether it's about tracking income, managing costs, or checking how well your team is working, these articles will give you the basics to make sense of these important reports.
Hours Tracked by Team Member
What’s in this Report?
Does include:
Archived, inactive, and deleted clients
Does not include:
Archived and deleted Time Entries
📊 What is an Hours Tracked by Team Member Report?
An Hours Tracked by Team Member Report is a document that details the number of hours each team member has worked over a specific period. This report provides a breakdown of the time spent by individual employees or contractors on various tasks, projects, or clients. It helps track productivity, monitor performance, and manage labor costs.
👨🏻💼 Why Would a CPA Need It?
A CPA would need this report for several critical reasons:
Cost Allocation: The report helps allocate labor costs to different projects, clients, or departments based on the hours worked by each team member. This is essential for accurate cost accounting and financial reporting.
Billing and Invoicing: For businesses that charge clients based on hours worked, the report ensures accurate billing. It helps verify that the hours recorded align with what is invoiced to clients.
Payroll Management: The report assists in calculating payroll by providing a detailed record of hours worked by each team member. This is necessary for accurate wage calculation and compliance with labor laws.
Performance Evaluation: By analyzing the hours tracked, the CPA can assess individual team members' productivity and performance. This can inform decisions about promotions, raises, or additional training.
Budgeting and Forecasting: The report provides data that can be used to forecast future labor needs and create budgets. It helps in understanding labor trends and planning for resource allocation.
Project Management: For ongoing projects, the report helps monitor the amount of time each team member is spending on tasks, allowing project managers to assess progress and make adjustments if necessary.
🔢 How is the Math Calculated for This Report?
The math behind an Hours Tracked by Team Member Report involves the following steps:
Tracking Hours:
Hours are tracked using time-tracking tools or timesheets, recording the time each team member spends on different tasks, projects, or clients.
Summing Hours by Team Member:
The total hours worked by each team member are calculated by summing the hours recorded over a specific period (e.g., weekly, monthly).
Calculating Payroll Costs:
If needed, payroll costs are calculated by multiplying the total hours worked by each team member by their hourly rate.
Payroll Cost = Total Hours Worked × Hourly Rate
Analyzing Utilization:
The report may also include utilization metrics, comparing the actual hours worked to available working hours to assess efficiency.
Utilization Rate (%) = (Total Hours Worked / Total Available Hours) × 100
✏️ Example Calculation:
Let’s assume a company has the following data for three team members over a month:
Team Member A:
Hours Worked: 160 hours
Hourly Rate: $50 per hour
Team Member B:
Hours Worked: 140 hours
Hourly Rate: $60 per hour
Team Member C:
Hours Worked: 120 hours
Hourly Rate: $55 per hour
Calculations:
Team Member A:
Total Hours Worked = 160 hours
Payroll Cost = 160 hours × $50/hour = $8,000
Team Member B:
Total Hours Worked = 140 hours
Payroll Cost = 140 hours × $60/hour = $8,400
Team Member C:
Total Hours Worked = 120 hours
Payroll Cost = 120 hours × $55/hour = $6,600
The report would show the total hours worked and payroll costs for each team member. This information helps the CPA and management track labor costs, manage payroll, and assess the productivity of each team member.