Internal and indirect time: PTO, holiday and overhead
Let employees log PTO, holiday, overhead and other indirect time in WiseCost by enabling indirect labor accounts in Company settings → Time Tracking.
Internal or indirect time is time that does not belong to a contract: PTO, holiday, overhead, G&A, bid and proposal. To let your team log it in WiseCost, go to Company Setup → Company settings → Time Tracking and, in the Internal / Indirect Time card, choose the accounts they can charge time to. Employees then pick one of those accounts instead of a contract.
Who can do this: an Administrator.
Before you start
The list offers every active expense account. Accounts that read as paid time off, or that have an indirect labor role in Company Setup → Accounts, appear first under Recommended. Only the indirect labor roles count as indirect labor in the Indirect Rate report, so classify the account if it should count. See Assigning account roles.
Enable accounts for time entry
- Go to Company Setup → Company settings → Time Tracking.
- In the Internal / Indirect Time card, open Accounts for time entry.
- Select each indirect account your team can log time against, and give it an alias your team will recognize, such as "PTO" or "Holiday".
- Optional: to let employees request PTO or leave ahead of time, set the Time off type and Associated employees. See Setting up time off.
- Optional: under Posting class for indirect entries, choose the QuickBooks Class coded onto every indirect journal line. Leave it empty if your company uses Projects and no Classes.
What happens next
When employees log time they see the enabled accounts, by their alias, next to their contracts. Labor Distribution posts that labor cost to the indirect account, which keeps direct labor and indirect labor apart in QuickBooks Online and feeds the Indirect Rate report.
Why it matters
Both DCAA timekeeping and time and effort reporting under the Uniform Guidance expect a record of all the time an employee works or is paid for, not only the hours charged to a contract or award. Internal time is how the day adds up. If you also require expected hours, it is what lets an employee reach their total in a week with a holiday.
Common questions
Where do employees log PTO or a holiday?
In the same Time Tracker. They choose the internal account, for example "PTO", instead of a contract. If it is a time off account, they can request a range of days ahead of time. See Requesting time off.
The account I need is not in the list. Why?
Only active expense accounts appear. If the account is inactive or is not an expense account in QuickBooks Online, fix it there and click Re-Sync. An account without an indirect labor role can be enabled, but the Indirect Rate report will not count it as indirect labor.
Further reading from the WiseCost blog
5 DCAA Compliance Mistakes That Small Contractors Keep Making
The same DCAA compliance mistakes appear in CPA practices repeatedly. Five preventable issues — and how to fix each one before they become audit findings.
Reviewed by a CPA
Direct vs. Indirect Costs in Government Contracting: A Practical Guide
A practical guide to understanding and classifying direct and indirect costs for government contracts. Includes pool structures, allocation methods, and common mistakes.
Reviewed by a CPA
How to Classify Indirect Costs (Fringe, Overhead, and G&A)
What counts as an indirect cost, and how to tell whether it belongs in Fringe, Overhead, or G&A, plus the unallowable costs that never reach an invoice.