Mastering Job Costs in SyteLine®
Job variances tell a story—and in manufacturing, you can’t afford to miss it. Profitability and efficiency hinge on knowing what those variances mean and catching them early.
Job variances in a standard cost environment can be tricky—operations are complex and reporting has to be timely. Here, we’ll shed light on the different types of job variances and how they’re calculated when Shop Floor Control Parameters are set to calculate variances against Standard costs.
The Role of Standard BOMs and Routings
First off, let’s talk about Standard BOMs and Routings. These are the backbone of your variance calculations. The data from the Standard Materials and Standard Operations forms serve as the control, so it’s important to run your reports, analyze the results, and document everything promptly. If you wait and the item’s cost has been updated via Roll Current Cost to Standard Cost, you might lose the ability to effectively interpret the variances SyteLine® posts.
Essential Reports for Managing Job Variances
Reports are where all this theory comes to life. Let’s talk about a few reports that can make your life easier:
- Job Cost Variance Report: This report is your go-to for insights into cost discrepancies at any stage of the job order. It’s particularly powerful when run promptly, offering a snapshot of the job’s cost performance by category—keep in mind that the standard column reflects the standard at the time the report is generated, which may differ from the item’s cost when the job was completed.
💡PRO TIP: There is only one variance column in the output. The column label tells you which amounts it's evaluating. By default, the Variance Type is set to Planned, which compares Actual against Planned. Be sure to change this to Standard before generating the report. - Job Materials Listing: If you’re looking to spot potential Material Usage Variances (MUV) before closing a job, this is the report for you. It lists the materials expected to complete the job and the quantities issued so far. While it doesn’t automatically distinguish between standard materials and those only defined at the job level, you can customize it to include such details, as well as a “qty difference” column and an “extended amount” column to help you anticipate material-based variances more effectively.
Heads up: The default version hides completed jobs. Making them visible requires a design change to the form. - Costing Analysis Workbench: This tool is a real game-changer. It lets you capture a snapshot of [selected] items before rolling costs, copying them with their complete BOM and routing to a costing alternative, and then "freezing" them for historical record-keeping. You can save these frozen costing alternatives indefinitely, making them incredibly useful for audits and variance analysis if you've captured the standard BOM that existed when the job quantities were completed.
Types of Job Variances
Understanding the distinct types of job variances is crucial for effective analysis. Here’s a quick overview:
- Labor Rate Variance: This happens when there’s a difference between the employee manufacturing rate and the operation standard labor rate. Most companies roll actual employee rates into a department standard. That way, the “Mfg Rate” holds steady and you avoid exposing individual pay rates on Job Transactions.
- Fixed and Variable Overhead Variance: These variances are posted when the actual hours differ from the expected time to complete the reported pieces. If no production is recorded, the full value is logged as a variance since no time was expected for zero quantities.
- Labor Usage Variance: Similar to overhead variances, this is posted when actual hours differ from what's required according to the item’s Standard Operations.
- Material Usage Variance: Material usage variance represents the difference between the standard quantity required and the actual quantity issued, extended by the standard cost of the material. If materials are only defined in the Job Order and are not part of Standard Materials, the extended amounts will be included in any routing variance calculated.
- Routing Variance: This occurs when there’s a remaining WIP amount after finished goods are moved from WIP and the MUV has been recorded, which is critical for identifying discrepancies in the production process.
💡PRO TIP: I highly recommend you have a separate account defined for each variance type to aid in your analysis of the results.
Best Practices: Managing Job Variances
Knowing the reports and variances is half the battle—now let’s talk about habits that make the insights stick. To stay on top of job variances in SyteLine®, consider the following best practices:
- Run reports early. The sooner you catch a variance, the easier it is to explain—and fix.
- Make sure all data—labor rates, material quantities, overhead costs—are accurately reflected in Standard Operations and Standard Materials.
- Use the Standard Cost Analysis found on both the Inventory Control Home and Controller Home forms. This standard feature shows the current cost, standard cost, cost difference between the two, QOH, and the value of the impact (QOH × cost difference) if a cost roll were to occur.
💡PRO TIP: If you’re on CSI10, I recommend a DataView to pull in additional fields, such as Source and/or Product Code. You can filter out items with zero QOH, and bypass form-level record cap settings. - When using the Copy Routing BOM utility, leave the default category set to “Current”.
- Train employees on the importance of precise time and material tracking so variances truly reflect production decisions.
Conclusion
Job variances don’t have to feel like a mystery. With the right reports and habits, they become clear signals for smarter decisions. By understanding the different types of variances and using the available reports effectively, manufacturing businesses can maintain control over their production costs and improve operational efficiency. Regular review and timely reporting are key to staying on top of variances and ensuring that production processes run smoothly.
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