What is the technician offset account

What is it and Why is it there?

The Technician Offset account is an Expense account that acts as a contra account to the Technician Wages expense account and should be placed underneath that account, so that you can easily see and calculate the difference between the two. This account is the Credit side of your Service Labour Cost of Sales account. It is set up this way to offset a different account to your service technician wages for two main reasons: 1) So the Technician Wages Expense account stays aligned with what comes from payroll, and 2) So you can see your Labour cost of sales without doubling your expenses from technician labour.

How does it work?

How this account works is when a Repair Order is posted the cost hours of the jobs will increase your Service Labour Cost of Sales accounts and then the other side will decrease your technician offset account. It's done this way so that the expense for technician hours isn't doubled up while still giving an accurate view of your Service sales income vs Cost of Sales. 

Your Technician wages account and technician offset Account usually won't fully zero each other out as there will be hours the technicians worked that weren't on jobs, so you were not able to sell those hours but still had to pay technicians for their time. 

When you invoice a service job you charge out the sale hours at whatever is an appropriate charge to the customer. The cost hours should be the time spent by the technician actually doing the work. Come month end you will have credit in the Technician Offset account that represents the hours worked that were sold to customers. 

To report on your Work In Progress figure, there is a report in service called “Repair Order Summary” which details the not yet invoiced jobs. (If you select the status of In Progress) the dollar value of this is the work in progress value. Eclipse will not post this, so if this is a figure you want represented in your Balance sheet, you will need to do manual journals at end of month. 

If you don’t use the system this way, you can have zero as the cost for an hour of labour. This is the simple way of doing things but will not yield any analysis data as we won't be able to provide a margin against labour sales and you will simply have to compare labour sales to the wage expense account manually. 

We recommend you check the variance as part of your end of month duties