As labor cost transactions are typically based on timecards, you must reprocess labor cost transactions when you have timecard adjustments. If you are using the Actual labor costing method, then you may also need to reprocess labor cost transactions when there are payroll adjustments. To ensure the accuracy of your labor cost transactions, you must adjust labor costs when you:

• Update the labor costing rule

• Want to correct costed labor transactions

• Update timecards

• Update payrolls

Most labor cost adjustments are processed by creating a reversal transaction to offset the original transaction and replacing it with a new re-instated transaction. The original and reversal transaction are called net zero transactions. In a net zero transaction, the original transaction expenditure item and the reversing transaction expenditure item are linked and marked as net zero. Since they are netted, the transactions are excluded from future processing, such as billing. When you process a re-instated timecard expenditure item, the current values in the labor costing rule are applied