Activity Cost
Activity Cost in ERPNext is used to define the per-hour costing rate and billing rate of an employee for a specific activity type. It helps organizations standardize labor costs and ensures accurate financial tracking of work performed in projects and timesheets.
These rates are automatically pulled into Timesheets based on the employee and activity type, and are used to calculate the total project cost as well as billable amounts.
Activity Cost ensures that every hour logged by an employee is assigned a predefined cost and billing rate, enabling accurate project costing, profitability analysis, and customer billing.
Accessing Activity Cost
To access Activity Cost in ERPNext, navigate through the following path:
Home > Projects > Time Tracking > Activity Cost
How to Create Activity Cost
Follow the steps below to create a new Activity Cost:
- Go to the Activity Cost list and click on New.
- Select the Employee for whom the activity cost is being configured.
- Enter the Costing Rate per hour for the employee.
- Enter the Billing Rate per hour for the employee.
- Save the record to activate the configuration.
Activity Cost can also be created directly from the Activity List, allowing faster setup when defining rates alongside activity configuration.
How Activity Cost is Used
When an employee logs time in a Timesheet, ERPNext automatically fetches the configured Activity Cost based on the employee and activity type combination.
- Calculates total project cost based on logged hours.
- Determines billable amount for invoicing customers.
- Ensures consistency in cost and billing calculations across projects.
