How to Record T&M Burden Allocation
Applies indirect cost burdens to direct labor and materials on Time and Materials (T&M) contracts as specified by the contract's billing rates.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Work in Progress - T&M Overhead | Asset | 12,500.00 | - |
| Applied Overhead - T&M | Contra-Expense | - | 12,500.00 |
💡 Accountant's Note
This entry records the allocation of indirect costs to a T&M contract using the provisional or contractually fixed indirect rates applied to the direct base.
Practitioner & Systems Framework
💻 ERP Architecture
Ensure the T&M billing rate table in the ERP reflects the correct indirect burden percentages.
⚠️ Audit Flags
Discrepancy between the indirect rates used for billing and the rates used in the accounting system.
📄 Required Documentation
Indirect rate calculation sheets and the T&M labor/material distribution report.
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Discussion & Community Questions
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