Overview
This article is Step 4B of the Understanding Accounting Integration series. For the full series, see Accounting Integration Setup: All Steps.
The Work In Progress (WIP) Labor Inventory and WIP Labor Expense control accounts relate to the costing of technician hours. Which General Ledger (GL) accounts you need to map to these fields depends on which Costing of Technician Hours option your dealership uses.
Option 1 — All technicians use the same labor cost rate.
Option 2 — Blackpurl tracks each technician's individual labor cost rate and maintains a running balance of Work In Progress (job clocking hours that have been logged but not yet billed).
For detailed information on these options, see:
Option 1: Single Labor Cost Rate
When Option 1 is selected, Blackpurl does not maintain a running balance of job-clocked but unbilled labor. Because of this, only one GL account mapping is required.
The WIP Labor Inventory field is hidden — it is not required under Option 1.
You only need to map a GL account for WIP Labor Expense. Blackpurl recommends using a BP Applied Technician Wages GL account. This account is typically set up as an expense to offset the wages you pay your technicians.
Option 2: Individual Technician Labor Cost Rate
Option 2 is the Blackpurl default. When this option is selected, you need two separate GL account mappings — one for WIP Labor Inventory and one for WIP Labor Expense.
WIP Labor Inventory — Set up as a Current Asset account. This account maintains a running balance of all job-clocking transactions logged on Service Jobs that have not yet been billed.
WIP Labor Expense — Set up as an expense account to offset the wages you pay your technicians.
How the journal entries work
When a technician job clocks their time onto a Customer Order Service Job, Blackpurl records a journal entry that includes the technician's name and Customer Order number:
Debit — WIP Labor Inventory
Credit — WIP Labor Expense
This builds a running balance in the WIP Labor Inventory account to represent unbilled labor your technicians have clocked.
When the Customer Order Service Job is invoiced, Blackpurl reduces the WIP Labor Inventory account via a journal entry on the sales receipt. This offsets the Cost of Goods Sold entry related to the Labor Income or Revenue GL account.
Important considerations for Option 2
When labor costing by technician is enabled, the following practices are important for keeping your accounts accurate:
Make sure each technician's base labor rate (per hour, based on Gross Pay) is correct in their User setup.
Update the base labor rate whenever a pay rise — or, rarely, a pay reduction — occurs.
If overtime is a regular occurrence, use one of these approaches:
Option A — Calculate an average to increase base pay by the gross pay over time. This gives more accurate Technician Performance reporting but requires a more involved calculation process.
Option B — Audit the WIP asset account regularly and journal against the labor Cost of Goods Sold (COGS) expense. Run an open Service Customer Order report at month end and use the labor totals as the WIP labor value — the same approach as stock counting. Note that pay period timing will affect this slightly, but it will even out over the long term. At end of financial year (EOFY), perform a more detailed audit aligned with the last pay period of the year to fully prove the trial balance.
Regardless of your overtime situation, audit the WIP Labor account periodically. Depending on the number of technicians in your department, this may be monthly or quarterly.
Restrictions
Accounting entries to the WIP Labor GL accounts must only come from the Blackpurl accounting integration — do not post manual entries to these accounts from your accounting package.
The balance of your WIP Labor Inventory GL account in your accounting package should always equal the labor costs accrued on open Service Jobs in Blackpurl.