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Owner of company changes timesheet
11

Owner of company changes timesheet

Owner of company changes timesheet

(OP)
My timesheet is usually about 90-95% billable each week. However, I notice that after the owner of our company reviews timesheets for payroll, all my non-billable time has miraculously disappeared into the billable projects' time. Most times its rounding half hours up to full hours and things like that. But there are other times when whole hours are being added to a client's project that was actually time spent on non-billable tasks.

Is this ethical? I think I know the answer, but the owner is adamant that its fine.

RE: Owner of company changes timesheet

Make sure you're not in the building if your client decides to demand an audit.  And while it might be true that this is a common practice (our youngest son quit a job a few years ago over this very issue) it does not mean that this is not in essence theft-by-another-means.

John R. Baker, P.E.
Product 'Evangelist'
Product Design Solutions
Siemens PLM Software Inc.
Industry Sector
Cypress, CA
http://www.siemens.com/plm
http://www.plmworld.com/museum/

To an Engineer, the glass is twice as big as it needs to be.
 

RE: Owner of company changes timesheet

Not only would I say it's unethical, I'd call it illegal from my viewpoint.  We are audited quite a bit and too many rules regarding the completion of timesheets.  We also have electronic timesheets and as an approving manager, I can't physically change the numbers.  I have to discuss the time with the staff to determine if time in question is billable or not.  In most cases I already know but occaisionally there'll be a gray area of "time spent cataloging calculations for a project when it's done. and is it for our benefit or the benefit of the client" type of thing.

Regards,
Qshake
pipe
Eng-Tips Forums:Real Solutions for Real Problems Really Quick.
 

RE: Owner of company changes timesheet

Since I charge to government contracts, it would be not only unethical, but also illegal, and I would get my butt put in jail if I were to do something like that.  You should make hardcopies of everything you submit from now on; date and sign them as you collect them.  Start looking for a new job; this one, while it may not necessarily land you in jail, might just taint your reputation by association, and that could be a difficult thing to overcome.

Run, as fast as you can, toward the exits; don't look back.  Someone who does that level of cheating could do other cheating things, equally bad or worse, towards you or a design.  You should immediately compare delivered drawings/reports against what you submitted, as well as verify that you haven't gotten cheated on your pay.

TTFN

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RE: Owner of company changes timesheet

People are drawing some pretty broad conclusions from not very much information.

If your customer has no other means to determine value for money than the ratio of billable hours they have bigger problems than your boss's (presumed) unethical skim.

RE: Owner of company changes timesheet

Data are the backbones of engineering, in whatever form.

Data should not be compromised in any form.

Timesheets are data.

I have and would again fire someone on the spot for falsifying data...in any respect.

Clients expect integrity in our data.  They expect integrity in us.  To do less compromises our individual and collective integrity, thereby demeaning the profession.

It is unethical and as Qshake noted, illegal in some respects.  Don't be a party to it.

RE: Owner of company changes timesheet

"they have bigger problems than your boss's (presumed) unethical skim. "

There's nothing you can do about your customer's issues and they wouldn't directly affect your reputation, employability, and incarceration.  Your boss' illegal and fraudulent actions and billings will.   

TTFN

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RE: Owner of company changes timesheet

There was a movie staring Tom Cruise where this was featured in a law firm. I think it was called The Firm.

It is unethical.

It is fraud.

I am sure fraud is illegal in all developed countries.

Fraud is theft by deception.

Theft of time is the most common form of theft in business, and even a personal phone call or idle chatter at the coffee machine technically falls into this category. Certainly calling in sick when not sick does.

Little fibs on tax returns are also a very common form of fraud.

I guess most people excuse or overlook the minor infringements, however this seems a major infringement to me. I would classify your boss as a shrewd business man. Shrewd businessman in these cases is code for crook.

Regards
Pat
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RE: Owner of company changes timesheet

Quote:

People are drawing some pretty broad conclusions from not very much information.
True.
But valid.
There is a legal term that covers this:
"falsis in unum, falsis in omnibus" and lawyers are the guys who will be involved if it is discovered.
So it is a pretty fair extension to assume that if he is cheating on the time sheets, he has to be considered as probably also performing some other frauds.
And, as IRstuff suggests, he risk to MetalFighter is what sticks to MetalFighter and hence a valid suggestion to check out what else maybe going on .... and we have another thread where a boss is condoning/colluding with a client who is changing drawings to show this vulnerability.

At some point the concerns will escalate.
If you find something more is going on, at what point does it become an issue of "to report this or not report it to the "authorities".

It seems to me that all too often in these threads the advice is "start looking for another" job. Do we hand that out too often? These are tough times and jobs are hard to get.

But I think the answer is that when you consider what is at stake, this is often the very best advice and should not be overlooked.
In some cases, and there is thread current where it is the case, the advice is to get out now, with or without another job to go to.
In most cases looking is a precaution, having a job offer in hand is insurance for tackling that tough issue and in some cases it is a necessary move.


 

JMW
www.ViscoAnalyser.com

 

RE: Owner of company changes timesheet

Whatever you do, don't sign anything after it has been doctored.  Keep your end of the process clean.

RE: Owner of company changes timesheet

Definitely unethical and probably illegal.  There seems to be an explosion of this behavior.  It still does not make it right.

 

"Gorgeous hair is the best revenge."  Ivana Trump

RE: Owner of company changes timesheet

No doubt many companies are struggling to survive; e.g., Borders Books' demise.  That may well spur such cheating, but desperation is not a valid legal underpinning.

I don't suggest bailing lightly, but your personal and professional reputation is at stake; those two things are part and parcel to what makes you an employable engineer.  While it's tough enough to find a job with a decent reputation, just consider how much harder it would be to try an find a job with scandal and accusations of illegal behavior swirling around your head.  Even if you are eventually cleared, mud is awfully sticky.

I've only had one such experience myself, but I had Pearl Harbor memos and emails prepared and fully expected that I would soon part company with the sleazer GM that ran the division.  Luckily, a GIDEP alert superceded everything, and the GM was only going to be there another couple of months, since he was well on the way to showing consecutive monthly profits.  As it was, I left the company about a month after the GM got promoted.

TTFN

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RE: Owner of company changes timesheet

This again seems another case where on the limited information given the owner does seem in the wrong, however some of the replies seem way over the top to me.

I am sure all timesheets are rounded up or down to some degree, does anyone book out anything in less than a quarter of an hour blocks? If so how far do you go minutes, seconds, nano seconds? Also is a time sheet a legally binding document, I genuinely don't know?

What the owner is doing would seem unethical and probably illegal, however how many people on here don't book time and ask for pay to be deducted if they take a personal call during work hours, is that any different?

I assume all those who say he is acting illegally and because he does this must do far worse have never taken a pen from work for personal use, taken personal phone calls in work time, declare every gift they have ever received at a seminar or trade show on their tax returns?

Theft and fraud are easy words to use but I wonder if you took everything that is theft and fraud how full the jails would actually be? How many on here could honestly say they have never committed theft from the company they work for?
 

RE: Owner of company changes timesheet

You seem to have missed the part where nonbillable hours were changed to billable.  

Rounding and miscellaneous minutes is a different matter, but only if the employee does that himself.  For someone else to arbitrarily and always round up billable hours is not a plausible action.

TTFN

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RE: Owner of company changes timesheet

There is too hard a line everywhere regarding this "...be 100% billable at all times..." mentality.  Employers (typically MBAs) expect "...95% billable or higher...", so if two engineers are at, respectively, 100% and 80%, they turf the guy at 80% and leave the other guy with a 70-hour week.

Within reason, "non-billable" is a cost of doing business in engineering; it is a price to be paid for keeping people retained at the ready.  Anyone who doesn't understand that needs to find or start another business.

Regards,

SNORGY.

RE: Owner of company changes timesheet

(OP)
We are a small company doing entirely private work. There's virtually no chance that we'll ever be audited. If I never say anything to anyone, it will most likely never be discovered. It's already been going on for 10+ years. I've worked there for 5 years and I just recently became aware of it.

You all have confirmed my fears. I suspected it was illegal.

I love working there (for other reasons), and leaving would be very difficult, especially since jobs are so scarce these days.

RE: Owner of company changes timesheet

I completely agree - it is illegal and unethical.  Bit I am sure we all know who the biggest offenders of this practice are - LAWYERS!!

Not saying all lawyers - but how can a lawyer work a 200 hour week??

RE: Owner of company changes timesheet

Is your work being billed on a fixed price basis?  If so, your boss is doing both of you a favour, ensuring that the next time that similar work comes in for bid, he bids enough hours to actually do the work.  Not everyone is diligent or honest about how much time they actually spent working on the job when it comes time to fill out their timesheet.

Is the work being paid for on a purely reimbursable basis?  If so, you need to know the terms of billing between your firm and your client's firm.  

Sometimes, bill-out rates contain a high fraction of overhead and are very strictly only for time directly working on the project, and don't include miscellaneous overhead-related tasks of any kind.  The billing structure in this case probably also bills the client for every long distance charge, photocopy or printer page printed, for use of software etc. In cases like that, the photocopier/printer is often "employee of the month"...  

In other cases, particularly for long-term projects involving many people for periods of many months or years, these miscellaneous costs might be rolled up into the (lower) overhead rate charged for the hours, but the understanding is that people will be billing 100% of the time they spend on the premises "working", including minor overhead tasks.  Even then, there are larger and more obvious overhead tasks that don't get billed, ever.  

So it's very important to know what your firm and your client have agreed, in order to understand whether your boss is fraudulently altering your timesheets, or merely correcting errors arising from incorrect assumptions on your part when filling them out.

RE: Owner of company changes timesheet

"merely correcting errors arising from incorrect assumptions on your part when filling them out. "

And, how is the boss able do this without asking the employee? or, without getting concurrence from the employee that the hours can be shifted?  

In defense companies, there are often internal corollary projects that complement contract work, and judiciously choosing which is what is often difficult.  But, if changes need to be made, they are ALWAYS done by the employee and initialed by same to indicate concurrence with the changes.  Never is there a case where a boss decides on his own, without input from the affect employee, that the hours should be moved into another category.  In the old days, when we had paper timecards, we were required to make hardcopies of the timecards to ensure that when an audit was performed, that what was submitted corresponded with what was charged.

If the OP has his own archival copies of his submitted timecards that differ from what was billed, that's a MAJOR problem already, regardless of whether the transfers were justified or not.  When you sign off on your timecard, you are certifying the correctness of your charges.  To have your charges changed without your knowledge, yet still retaining your original signature certification will most likely get you into hotwater in any audit.  You'd have to explain why your charges are the way they were billed, not your manager.

TTFN

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RE: Owner of company changes timesheet

I quite often change my time my employee's hours to cover things like what they consider to be "learning" while I consider it research or vice versa. Generally this would reflect my discussions at the start of a project with the client. For example, if we are doing an alternative construction bid and we have to get info from a few manufactures, if this is productive to that project it gets charged. Don't always assume your boss is an idiot.

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RE: Owner of company changes timesheet

Obvious question - have you raised these concerns privately, and nicely and politely, with the owner?

RE: Owner of company changes timesheet

3
When you are running your own business, the so called overhead eventually has to be paid by a customer.
 It is either included in the hourly rate, or it is directly billed to the customers account. There have been more fights, mis understandings , and squabbles over this simple fact than any other. Go to your boss and ask him how he would like you to account for your non productive time. If you get it right the first time, there should be no reason for him to alter your time sheet.
B.E.

The good engineer does not need to memorize every formula; he just needs to know where he can find them when he needs them.  Old professor

RE: Owner of company changes timesheet

slta... I would suggest that that would be a really BAD move...

Dik

RE: Owner of company changes timesheet

4
I'll go against the grain here for a bit.

It's unethical and possibly illegal if you're billing your client by the HOUR.  If you're billing your client on a lump sum / % complete basis, then they're not getting charged any more in any case, and the only thing it does is kink your internal project accounting.  Which may or may not be bad depending on your corporate culture.

I worked at two big consulting firms straight out of college, and both of my managers did this all the time, because that was the game each department played to try and show billability while still coming in at or under budget for their jobs.  Sometimes you worked overtime and didn't bill it, sometimes you worked less than necessary and billed overhead to a project, sometimes you worked on one project and billed another.  I didn't consider it unethical because the client was paying the same fee no matter what.  So why did my PM do it?  Raises and bonuses.

Once these Harvard Business School nitwits got a hold of engineering consultancy and started implementing the "billable hours" model to project tracking, they borked the whole industry up.  Now a poor engineer who's slow and sloppy looks 100% billable, and a good fast complete engineer looks like he's lazing about, because he's "less billable."  All the project tracking tools track hours, they don't track how fast your task goes in those hours, so the Corner Office guys don't have a clue who's good and who isn't.  They look at the billability, and give the slow sloppy guy the raise and the bonus.  So the PM or department manager has to monkey with the timesheets to try and show the Corner Office Harvard Nitwit the sorts of indicators he's looking for on the timesheet, to ensure that what should happen does happen with regards to hiring, raises, and promotions.

Every large company I've ever worked for has worked that way.  And the fundamental flaw goes back to what I call "managing by hour" instead of "managing by task."  

Is it falsifying data?  Sure.  Does it drive Ron up the wall?  Sure.  But you're tracking the wrong data.  You should be tracking tasks, not hours, and correctness, not billability.  The first step to getting your internal systems working properly is to sever the ties between "billability" and reward.  And every big company I've ever worked in goes completely the opposite direction.

 

Hydrology, Drainage Analysis, Flood Studies, and Complex Stormwater Litigation for Atlanta and the South East - http://www.campbellcivil.com

RE: Owner of company changes timesheet

beej67:  when asked by clients why we are so reluctant to do work on a T&M basis, I tell them that we don't have enough people, much less enough stupid people, to make money that way.  When they laugh, and they usually do, you can see by the look on their faces that they understand this to be true based on previous experience doing work such as what we do on a T&M basis.  The ones that don't laugh are going to be tough customers regardless how the contract is structured, and it's best to know that beforehand.

T&M is where many engineers live these days, and they have no choice in the matter.  It's important that they play that game by the rules without committing fraud.  Unfortunately, the hourly rate competition resulting from the T&M model has led in large part to the downfall of engineering from true profession to commodity in my opinion, even though it seems to be modelled after how other professions such as law often sell their services.

RE: Owner of company changes timesheet

sorry sita... misunderstood... I was thinking the 'client' and not the owner of the engineering firm... you are correct...

RE: Owner of company changes timesheet

If engineers are bright, and they are, why has the "profession" degraded to a commodity status?

If you don't have accurate accounting per project, which should be task oriented, you reach a point of not knowing how to bid projects because your estimates are inaccurate.  I know of a large company that reached that point because of inaccurate accounting.  They began losing bids rather than winning them.  Executive management determined what was going on and put a quick and painful stop to it.  They began to require strict accounting even down to not padding an expense report.  Do engineers pad expense reports?  Some do.

There are some plants that will fire people for falsifying company documents regardless of the document.  They will fire for thievery.  They fire for all sorts of things.  I found that to be one of the best environments I worked in.  Standards were high and most people rose to meet them.

Everything seeks the path of least resistance.  Encouragement to do so just makes the human side of that worse.

RE: Owner of company changes timesheet

Every large company I've worked strives for the "Earned Value" approach, but they don't often succeed, but that's another matter altogether.  

Nonetheless, the cost account manager is graded on BOTH hours and progress.  One or the other sliding immediately shows up as a variance that must be corrected.

While changing the billing may be justified and even necessary, to do that behind the back of the employee is just wrong, and makes a mockery of having him sign and certify his hours.

TTFN

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RE: Owner of company changes timesheet

it's all good dik :D

So, MetalFighter?  What are you going to do?

RE: Owner of company changes timesheet

(OP)
Just FYI....we work 100% on a T&M basis and bill by the HOUR. That's why I've suspected that this was wrong, but needed some other opinions.

RE: Owner of company changes timesheet

I've been avoiding this thread because I KNEW it was going to be chock full of "Quit!!", "Hire a Lawyer", "You're going to jail", because these kinds of threads always are.  I wasn't "disappointed".  My contracts say that I will round part hours up to full hours.  So I would bet that the rounding part of the changes is a response to a formal or informal version of that.  Moving time from non-billable to billable could be an intrepretation.  Next time it happens, ask your boss "what are the ground rules here?  I hate for you to have to spend so much time on my timesheet".

David

RE: Owner of company changes timesheet

Quote:


Most times its rounding half hours up to full hours and things like that. But there are other times when whole hours are being added to a client's project that was actually time spent on non-billable tasks.

David.

I agree that rounding up if declared in the contract is both common practice and ethical so long as it is understood that is the deal, however the part in the quote from the OP in bold was the part that tipped me over the line. Surely adding an hour or more is more than normal rounding up and is therefore deception unless that possibility is also part of the agreement for whatever reason.

At least it's not totaling up to 120% billable hours.

Regards
Pat
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RE: Owner of company changes timesheet

I suspect the truth is somewhere between patprimmer's and zdas04's suggestions, but I fully expected that as soon as I read the OP's description, that it was a location that billed by the hour.

I used to work for a mining services company that had contractual arrangements for service, with most charges based around an hourly rate with some disbursements.

One of the arrangements was a minimum 1 day (10 hour) charge for certain client, of which some jobs had an actual work duration of 1.5 hours. Often transport time came into it, but I was aware of a few instances where two clients were charged minimum fees for the one operator managing two 1.5 hour jobs in the one day. As far as I was aware the clients were happy with this, as ethically unstable as it may have been. This experience to me supports what zdas04 stated.

However, I tend to lean towards the consideration that theres no benefit in the boss altering timesheets without a benefit to the company, earned or otherwise. Rounding up of hours can be carried out by admin staff with a papertrail.

If its an hourly rates engagement, the client has every right to enquire as to the amount of hours spent against work produced. In such a position I'd be quite wary as well.  

RE: Owner of company changes timesheet

Question has the boss done this or has the admin, do you know for certain whom is to blame??? have you seen the boss make the changes?

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RE: Owner of company changes timesheet

By "interpretation" I meant that different people see things differently.  I recently spent 2 hours with the new eng-tips search engine trying to answer a client's question.  I was unsuccessful and didn't bill the time to them.  Later I stumbled on the answer in eng-tips.com and was able to provide it to my client.  Originally, I was satisfied eating an unproductive dead end.  When I proved to myself that the answer really was here, I was very comfortable moving the hours from non-billable to billable.  I feel that an unproductive literature search that never finds the information for the client's project is "training", but a literature search that results in improving a result for a client is billable.  Personally I don't bill unproductive searches, but I bill every minute (rounded up in total to whole hours) for productive searches.  Often the unproductive-search hours will sit in "training" for weeks until a productive search for the same information yields pay dirt, then the unproductive stuff moves out of training.

Maybe it is unethical, but I've discussed it with clients and all of them feel that I'd be justified billing them for the time spent searching even if it never produced fruit.

David

RE: Owner of company changes timesheet

David:  most people in your situation would bill them for any time spent working on their problem, even if the result was "sorry, I've looked into it and regret that I can't help you".  That makes it simple.  What you're doing is fairer than that, and I'm sure your clients appreciate the fair treatment.

RE: Owner of company changes timesheet

David, I have no qualms about anything you personally do with your own hours and how you bill them, since they are your own work and you know what you did better than anyone else could.  

What I would question is how you might change hours for one of your subordinates without asking exactly how the hours were spent on "nonbillable" work.  This is the one part of the OP's that remains unanswered.  Unless you, as the manager, shadowed your engineer during the 40 hours in question, what basis would you have to determine where to bill the hours, particularly without input from the employee?  If the boss came to the employee and asks, "Why are these hours nonbillable," and they both come to an agreement that there was an error or incorrect interpretation, then all would be acceptable procedure.  The employee would make the change and re-certify his hours accordingly.  Now, it might still be mischarging, because they both were in error, but it wouldn't be a criminal act, unless they knew they were mischarging.

So, for me, the issue is the backhandedness of the changes, and the blatant repudiation of the OP's certification that the hours were indeed "nonbillable."  Both of these are serious failures in management, at the very least.   

TTFN

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RE: Owner of company changes timesheet

It's not about "fair", I just figure if my clients wanted to pay for unproductive work they would have stayed with the big firms.

We don't know what categories were changed, my point was that there are times that different people see the same thing differently.  If the category was "looking at U-Tube Porn", then one person might see it as "training" and another might see it as preparation for the screwing they were going to get for being late.

David

RE: Owner of company changes timesheet

Hm.  Watching vibrating element flowmeters just doesn't do it for me, zdas.  Just sayin'.

RE: Owner of company changes timesheet

Surely it depends on the deal with the client.

I have had 3 different deals running simultaneously.

1) $200.00/hour for time at his site rounded up to 15 min, no travel time, no training time other than actually investigating the problem and directly accessing very specific technical data there and then. Only billed for at the workface hours not even coffee breaks etc.

2) $80.00/hour for all time, including travel and speculative research. The research might confirm there is no solution to the problem, but it is still billed, including coffee breaks etc.

3) $40.00/hour for a guaranteed retainer to be on call for 20 hours a month whether or not work is even done. Some of the time can be done for other projects when not called. This was unusual and complicated as it cut short and replaced an existing contract where commissions would have been due anyway. If they used no time, they still got billed 20 hours. If they used 40 hours they got billed 40 hours at $40/hour. If they used 60 hours they got billed 40 at $40 and 20 at $80/hour, including travl time, coffee breaks etc.

Bottom line, each was agreed with the client and billed accurately according to that specific agreement.

If billed according to the agreement, then they are in fact billable hours.

Regards
Pat
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RE: Owner of company changes timesheet

I think that a whole lot of the ethics/legality of this would hinge upon the details of the contract with the customer, and without knowing that, we are all simply bystanders speculating on something we don't know the details of.



 

RE: Owner of company changes timesheet

lacajun:

Quote:

If you don't have accurate accounting per project, which should be task oriented, you reach a point of not knowing how to bid projects because your estimates are inaccurate.

Yep.

But bids aren't based on what it'll take you to do the work anyway, usually.  They're based on how much you think you can get the client to pay you, and how much you think your competition is bidding.  It's like poker - you don't bet your hand, you bet the other guy's hand.  The only thing you need to be sure of, when bidding, is you won't lose a LOT of money on the project.

Hell, in today's marketplace, many engineering firms are choosing to lose money on jobs just to get the work.  It's cheaper to work and lose money on a job than it is to sit around and twiddle your thumbs not working and making zero.  Contractors call it "buying work."

Maybe that's not how it is in electrical, but it's how it's been in Civil since 08.  

It's nice to pretend that all your employees would work at the same rate, and you could quantify progress on a task by hour, and use that knowledge, plus a task breakdown, to bid a job.  But that's simply not the real world.  What happens in the real world is everybody does all this accounting, then it goes up to the guy bidding a job, and then he picks a number out of a hat that he thinks will win him the work.  If that number is low, then the "shinola rolls down hill," and the production engineers have to work overtime.  That's the business, if you're in a fixed fee project environment.  In AEC at least.  

 

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RE: Owner of company changes timesheet

beej67:

I soooooooo wish that you were hopelessly wrong.

But...you're not.

It is called "MBA" bidding.  (Must Bid Awfully).

Not that I am in any way bitter...

Regards,

SNORGY.

RE: Owner of company changes timesheet

Worked for one company that was preparing bids for radar systems. We had lost a few recently becasue the bids were too high. Figured out that what we had bid wasn't what the customer wanted. Our bids were made from taking existing designs and submitting them with the extra things not in the RFQ being passed off as 'make the package better'. No sale on a few of these. Now the comapny realizes what they had done and the next RFQ comes along. They put together a proposal, only including what the RFQ wanted, and priced it at what would be a profit yet we felt would win the contract. Sent it to corporate and they raised the price because we didn't have a 8% profit. Submit the bid and it losses to a bid that was between the original and the 8% profit one. Unfortunately, losing that bid was too much and the layoffs began. From 1300 to 300 in 6 months.
 

"Wildfires are dangerous, hard to control, and economically catastrophic."

Ben Loosli

RE: Owner of company changes timesheet

beej67, I've not worked in engineering firms but manufacturing plants.  We had to be really close to our estimates and ROI or our merit reviews weren't good.  This was particularly true for our individual projects.

A finance friend criticized engineers for our "inability" to properly estimate projects and always asked for more money on the large capital projects.  True enough.  However, the engineers did engineering estimates but those never hit the ROI HQ wanted.  HQ would request another estimate, a lower one.  The plant would provide it.  HQ would request another lowered estimate because it still wasn't going to provide the ROI sought.  They never said what ROI would fund the project.  It was a guessing game.  They'd finally hit that magical number and the project would get funded.  Then the Engineering Change Notices began.  Eventually, on some projects, supplemental funding was requested.  You can only strip so much out of a design and get away with it.  Eventually, they would have just about everything back in the design according to the original engineering estimate and the ROI wasn't as expected.

They're called engineering estimates for a reason.  They are not ROI estimates or accounting estimates.  It seems a lot of places have accounting "rules."

I had to pay for a parking lot on one of my projects and I did I&C work.  It was a payback for another I&C project that overran its budget and borrowed from another project to get completed.

Life sure gets messy sometimes, eh?

RE: Owner of company changes timesheet

My experience has been, for the past 30 yrs, that the initial engineering estimate was almost always the correct project cost.  Invariably, someone, BD, etc., would demand a "cut" or a "challenge" to be more competitive.  The bid would get reduced by 20%, 30%, or whatever; we'd win, and then we'd overrun.

I've always wondered whether this was technically ethical, but no one dares to actually address the question, for fear that it might be so.  And, of course, "everyone" does it, so we have to; the customer often attempts to second-guess our bids with their own "cost realism" models, but they're often pretty crude anyway.  Net result is that there are few development contracts that come in on budget.  Production is another matter altogether; costs are generally substantially firmer, although often there are systems that aren't yet ready for prime time, and the production costs go through the roof because there are the Rumsfeldt "unk-unks" that have to be fixed after production starts.

TTFN

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RE: Owner of company changes timesheet

The games get interesting when the "client" is the source of the scope cuts for the reasons discussed above.  They get a bid based on a scope that meets the bean-counters' needs, then attempt to creep the "contractor's" scope to get back into the design what they never felt they should have cut out of it in the first place.

RE: Owner of company changes timesheet

So lets keep talking this through, because it's something that has bugged me for almost two decades, and I have some creative ideas on how to fix it.

The fundamental problem goes back to trying to shoehorn a salary based compensation system into a lump sum contract.  If all your guys are on salary, then you carve their efforts up into hours and budget them that way, which produces all the problems we've enumerated.  But what if you didn't do salary at all?  What if you did an engineering version of piece work, and completely changed your project accounting paradigm to match that?

Say I'm the boss/owner, and I get a $100k engineering job.  I take 20% off the top for O&P, another 10% contingency, which leaves $70k left for engineering labor.  I divide all the tasks up by ratio / difficulty, and then I offer shares in the project to my employees.  They buy a share with their labor, and get paid when the project gets paid.  So it's more like a team of 1099s than a typical project team.  One employee takes four shares for the grading, another takes three for the erosion control, one takes two for the permitting activities, etc.  Pay the shares out as you get paid on the project.

It's got some drawbacks in that your employee income is variable, not fixed, but it has some great benefits too.  One benefit is you never have to worry about laying people off, since people only get paid for billable work.  Another is "project ownership" - you don't get slackers who don't care about finishing a project up, because finishing the project up is how they get paid.  And your project accounting is built from the ground up to reflect what you want it to reflect - the percent completion of the project - without having to translate things into hours and back out of hours, when that process of translation is so often gamed or tweaked or monkeyed with in the accounting.  Another superb benefit is your employees make as much money as they want to make.  Want more?  Work more.  Want to work less?  Take fewer shares, earn a little less, and spend time with your kids.

Seems like a very sensible way to build a company to me, but some others I've posed the idea to seem to think it'd never work.  Then again, older engineers like to manage by walking up and down the cube farm looking over shoulders, instead of checking out the cad files at the end of the day to see what got done.

 

Hydrology, Drainage Analysis, Flood Studies, and Complex Stormwater Litigation for Atlanta and the South East - http://www.campbellcivil.com

RE: Owner of company changes timesheet

The primary reason this won't work is that unbillable time is unpaid time.  As a piece-part worker, you can't always get full time employment; if my piece is serially dependent on someone else's, then what am I doing for possibly months at a time?  Were I in that situation, I'd need some bridge work to maintain my own cash flow, and I wouldn't necessarily be available anymore when my piece needs to start, which puts you behind schedule and potentially defaulting, unless you immediately find a replacement.

This is the primary reason companies aren't set up that way; paying for the unbillable parts are the premium for ensuring that workers are available, if and when and whenever the company needs them.  In a sufficiently large enough company, you try to run a variety of projects on different schedules to try and maximize the billable time, AND ensure that you bodies when you need them.  Once you go this route, you're at the way companies are run currently.

TTFN

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RE: Owner of company changes timesheet

"""It's got some drawbacks in that your employee income is variable, not fixed, but it has some great benefits too.  One benefit is you never have to worry about laying people off, since people only get paid for billable work.  Another is "project ownership" - you don't get slackers who don't care about finishing a project up, because finishing the project up is how they get paid.  And your project accounting is built from the ground up to reflect what you want it to reflect - the percent completion of the project - without having to translate things into hours and back out of hours, when that process of translation is so often gamed or tweaked or monkeyed with in the accounting.  Another superb benefit is your employees make as much money as they want to make.  Want more?  Work more.  Want to work less?  Take fewer shares, earn a little less, and spend time with your kids."""

  I had some first hand experience with this. Some years ago I was giving my employees 1/3 of the invoice for the labour part of the job.  I had one guy who never made more than $250 per week, even though his hourly rate had doubled. It turned out that he lived at home with his mother, and this was all the money he needed to go out and play. So when he earned that much, he just stopped working. I eventually had to let him go.
B.E.

The good engineer does not need to memorize every formula; he just needs to know where he can find them when he needs them.  Old professor

RE: Owner of company changes timesheet

The model you are describing bee67 is basically a company takes on a project and takes 30% of the cost to run that project and then sub contracts out all the work. Some companies do work this way, but it is not without problems.

The main problem is you effectively have lots of small companies whose main priority is not the same as yours it is what benefits them most. If one company does the project, at least in theory, they should all be working for one common goal.

The old saying goes a chain is only as strong as its weakest link. Whilst a company doing a whole project might take a 15% penalty clause for late delivery would someone who is only getting 1% of that amount also take the same 15%? Any one of the companies taking just 1% of the cost could see the whole project go over time.

You also seem to over look the fact that whilst you might consider a certain task to be worth 4% of the budget you might not find anyone willing to do it for less than 15%.
 

RE: Owner of company changes timesheet

(OP)
It happened again. I print my timesheet now both after I submit it, and after the owner reviews it. I compared them this week, and 3 whole non-billable hours were each moved to three different projects. No rounding up...just flat out adding hours to projects that I never worked.

I hate this!!!!

RE: Owner of company changes timesheet

MetalFighter,
Did you ask your boss whether or not your non productive time should be charged as billable hours?
  Some companies require that every hour you are at work be billed to a job.
B.E.

The good engineer does not need to memorize every formula; he just needs to know where he can find them when he needs them.  Old professor

RE: Owner of company changes timesheet

(OP)
No, I didn't ask him about that. If I'm not working on a project, I'm not going to charge it to a project. Likewise, non-billable time is just something that must be accepted for a project manager like me. I'm not a drafter or somebody like that who can conceivably be 100% billable. We have no such mandate, and even when he changes our timesheets, he many times does not remove all of the unbillable time, just some of it.

The point is that, for example, invoices went out this past week, and I studied one project, and discovered the client will be paying $190 more on their invoice directly due to extra hours being added that I never worked on that project.

The directors are planning to talk to him about this tomorrow. If he refuses to budge, I have to start looking for another job. I just can't live with this. My real question at that point is whether I report what he's doing to the authorities. It's stealing!

RE: Owner of company changes timesheet

beej67- I have often thought of the model you suggest (eat what you kill) for a limited partnership.  Overhead tasks are simply mutually agreed upon debt to be paid by each partner based on their share of the business.

I liked your 1099 reference.  I assume you mean the old system of the artisan house where groups of artisans on the shop floor would bid for portions of the job.  This system of course died when the build to engineering drawing transformed artisans from independents to dependents of the engineering office (which has been very good for engineers and later MBAs).  Presumably we've seen the same idea- that engineering could be divided by the same business model as was previously employed by artisans.

You can make it work.  I like the limited partnership as partners can either focus on sales or contract engineering or both with partners collectively deciding a fair exchange as well as shares in overhead.  Partners can also make use of associates as paid employees until such time as they are deemed ready for partner status.

RE: Owner of company changes timesheet

What are all of us told by management? We're supposed to be ethical and charge our time where it belongs. Fine except when it's timesheet day, then management conveniently forgets and is only interested in weekly utilization.

Half-hour here; half hour there; does it matter? I suppose we could say there are times when the client calls at lunch or quitting time with a request and we dont bother to record it on a time sheet. So the boss makes up for it another time. When I worked for a government agency my boss took the position that the contract amount was what he was willing to pay; since he beat the consultant's fee down they should take every cent in the contract.

Perhaps consultants should employ moral philosophers to decide these questions. smile

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