Job Costing & Reporting

Transcription

1 Job Costing & Reporting Overview Jobs are used in QuickBooks to capture both costs and/or revenue related to projects that are in turn linked to customers. They can be used for internal cost only jobs or to projects that will be charged to customers. A job differs from a Class in that it is linked to a customer and is generally akin to a project whereas a class can be used on an ongoing basis for a business department, geographical location etc. Typically projects charged to customers are either Fixed Price or Cost Plus (time and materials), although they can be a mix of the two For Fixed Price projects, it is especially relevant to measure estimated costs to actual costs because cost overruns will affect profit margins. QuickBooks supports this measuring process through the use of Estimates (see separate document on using Estimate) and then running reports that compare Actuals versus Estimates. Note it is also possible to enter budgets against jobs and then using the Profit and Loss by Job, report on actual versus Budgets similar to Estimates to Actuals. This is not suitable if customer invoicing is going to be based on the Estimate and has the added disadvantage that budgets are time based and would require more effort to set correctly especially if the job goes across financial years. Additionally you cannot enter quantities just dollar values. However this is another option that may suit some business models especially as it is uses accounts not items. Estimates work on Items although they can be genericl. Estimates can also be used to generate invoices to customers where the invoicing is based on an estimate eg Progress Claims in Fixed Price Jobs. If the Project is Cost Plus - then the invoice will generally be built from billable costs and stock issues booked to the job. There is a separate procedure on setting up and using Estimates. This procedure explains how to accumulate job costs and then report on them. Job Costs can come from a number of sources Employee timesheet hours Supplier Bills/Write Cheques/Receipted purchase orders Stock Issues The main difference between recording costs for Fixed Price as opposed to Cost Plus jobs is that for Cost Plus jobs you would normally tick the Billable column so that the costs flow through on to the customer invoice. For Fixed Price the invoice is built in line with the contract not the costs. Apart from this there should be no difference. Timesheets All time spent on customer jobs is recorded either via the Weekly Timesheets function or directly into Payroll itself. When setting up the employee there is a tick box Use Time Data to create pay cheques. This must be checked for timesheet data to flow into payroll and thus on to the job. Timesheet data will not be costed to a job unless it is costed through payroll (or a supplier bill if it relates to a subcontractor.)

2 The Use Time Data option does two things it passes timesheet data through to Payroll, plus it enables use of Items on the pay cheque even if time data is created in Payroll rather than from time sheets Tick this box if you want the timesheet data to feed into payroll or if you want to enter hours against jobs in payroll directly and use service items to track against Estimates. Entering weekly timesheets 1. From the Employee Centre Enter Time Use Weekly Timesheet. 2. Type the name of the person who performed the work. The person may either be an employee or a supplier ie a subcontractor If time data already exists for this person for this week, this is displayed and can be edited. 3. If necessary, change the date range of the week displayed: o To change to the previous week, click Previous. o To change to the next week, click Next. o To change to any other week, click Set Date and enter a date in the week you want to display. 4. Enter the Customer/Job 5. Enter the Service Item. Note the Service Item must have been set up with a rate against it in the Item List or set a Billing Rate Level on the employee if it is to be used in customer invoicing. If both are set Billing Rate Level will override the rate against the service item. Service Item is not mandatory but is required to report actual to estimates by item 6. (Optional) In the Notes field, type any additional information about this activity. 7. (Optional) In the Class field, type the name of the class you want to associate with this activity. 8. For each day of the week that work was performed, type the number of hours worked in the appropriate date column. You can also enter the range of hours worked, such as 8-5. If you are not going to bill the customer for the work ie it is a Fixed Price job, click on the icon for Billable and a red cross will appear it will not then be passed into the customer invoice.

3 9. Continue entering additional lines, if necessary, to record time spent on other jobs, doing other services, or other payroll items. 10. It is possible also to enter Personal and Holiday Leave on the timesheet or in the Payroll screen 11. Save the timesheet. If you have indicated that the hours are billable to the customer next time you go to raise an invoice for the customer after the Payroll has been run, and click on the Time Costs button these hours will be available to include in the invoice along with the rate set on the Item or Billing Rate level for the employee Note 1 The hours will not appear as a cost against the job unless either the employee has been paid or a subcontractor s invoice has been received. 2 Generally the employees will be paid on an Hourly rate basis rather than Salary 3 If the person for whom you are entering the hours is a subcontractor rather than an employee, you should mark the time as non-billable, because the entry will flow into the customer s invoice after the subcontractor s invoice has been entered. So it is only employees working on time and materials (Cost Plus) jobs who should have billable hours on a time sheet 4 It is the expense account against the Payroll Item not the Service Item that is used to post the costs from Payroll into the P&L 5 If the timesheet is for a subcontractor ie a Supplier the Payroll Item column is not displayed as this will not go through Payroll Costing Super to the Job If the Super also needs to be costed to the Job - in Payroll Items tick the box Track Expenses by job

4 The super will then be pro rata ed against each job recorded. If you have used Service Items when recording employee hours the super will be included in the service items in the Actuals versus Estimates report Entering data directly in to Payroll You can enter job related data directly into Payroll rather than through Timesheets, however the box Use Time Data to Create pay cheques must be ticked on the employee record if you want to add a Service Item. If it is costed to the job but not a service item as well the actual costs will be accumulated under the heading No Item on the Estimate v Actual Job Costing report. In Payroll you can record a negative hour entry if you have posted through more hours on the Timesheet than you are going to pay Setting up Service Items to use on timesheets All Service Items to be used on timesheets must first have been set up in the Item list In this screen, you need to enter the rate that will be charged to the customer, the tax code and the revenue account that will be updated when the sales invoice is generated. The Description entered here is the description that will default into the invoice.

5 Tick the box This service is used in assemblies or is performed by a subcontractor, if you will be recording both Costs and revenue against this item this enable the Cost and Sales fields to be completed Subcontractors Invoices When the subcontractor submits his invoice, this is entered through the Suppliers menu as an invoice. If hours have been entered for the subcontractor via the Timesheet entry, the following message will be displayed Select Yes and the following pop up window will be displayed Enter the dates that the subcontractor recorded time in the timesheet and all timesheet hours that have not yet been invoiced will default in with the cost rate that was set up against the item on the item record You can now check that the invoice equates to the hours entered in the timesheet and the rate that has been agreed. If the time is to be billed to the customer, then click on the icon in the right hand column to tick it as billable. This item will now appear on the next invoice that you raise for the customer.

6 Other Supplier Costs Any costs from a Supplier Bill, Write Cheques or Receipted Purchase order can be costed to a job, simply by recording the job on the input form. These costs can either be Expenses or Items. Generally items would be of a type Service or Other Charge not Inventory. For Inventory items these should be purchased into Inventory and then booked to the job via the invoice to get the correct accounting entries. If you are purchasing any items directly for a job they should be set up as Service items. Stock Issues to a Job If items are issued out of inventory to a job and need to be costed against the job (ie the customer is not being invoiced for them) record via Inventory Adjustment and record the Customer/Job at the top If however you need to charge the customer for these items, then they should be recorded directly on to the customer invoice in the standard manner. This will then both record the cost to the job and the associated revenue. If you want to book items to the job, charge the customer but not show all the details on the invoice this can be done via a Group Items as follows. 1. Set up a group item called 'Materials' on your Items list. Include all the stock parts you normally use as materials in a job. You can omit quantities if they vary from job to job. Note: If you don't want QuickBooks to print each item from the group, clear the Print items in group check box. 2. On the tax invoice, type the group name in the Item field. After QuickBooks displays all the individual items in the group, you can edit the quantities for each item in the Qty field. QuickBooks automatically adjusts your stock when you record the tax invoice. Customer Invoicing When an invoice is raised for a customer with outstanding billable charges the following message will appear

7 Click OK to see the costs In the following screen, costs are separated into 4 sections 1. Time 2. Items 3. Expenses 4. Mileage There is a further option for transferring Billable time depending on the amount of detail that you want on the customer invoice Time this is from the Payroll hours are as per payroll and rate will be either the rate set on the Item or the Billing Rate level on the employee. Note that Super is not brought in you need to ensure the rate includes all On Costs. Notte also the hours must be processed through Payroll to appear here

8 Items this will be from anyiitems recorded on a supplier bill, receipted purchase order or via Write Cheques. The rate will be the Sales price set against the Item or if that is set to $0 the cost of the Item. If the sales price is set to $0 and the cost price defaults in refer to the procedure on Reimbursable expenses on how to add in a markup via a Subtotal item and Other Charge item. If you are adding in a markup then Items need to be brought into the invoice first for the subtotal to work although you can subsequently insert the subtotal and other charge lines. Expenses this is any expense that was recorded on a Supplier Bill, Receipted Purchase Order or via Write Cheques. This comes through at the cost recorded on the original document and there is an option to add a markup and specify the account where the markup will go. (See additional notes in the procedure on Reimbursable Expenses because if it is selected in the Preferences to track invoiced reimbursable expenses as income then the Income account must be set on the expense account.) Note also that if there is a markup, QuickBooks will automatically create a subtotal and create a second line with the total markup for all reimbursable expenses. Select all the lines that need to be brought into the customer invoice and then add other lines as required.

9 Job/Time Reports The following reports are available on jobs and provide information on job profitability, tracking of estimates to actuals and time spent on jobs. 1. Job profitability summary 2. Job profitability detail 3. Job estimates vs. actuals summary 4. Job estimates vs. actuals detail 5. Job progress invoices vs. estimates 6. Item profitability 7. Item Estimates vs. Actual 8. Profit & Loss by Job 9. Estimates by Job 10. Unbilled Costs by Job 11. Open Purchase Orders by Job 12. Time by job summary 13. Time by job detail 14. Time by Name 15. Time by Item Most of these are self explanatory. The most useful are: Job profitability summary report This report summarises the revenue and expenses from each customer. If there are multiple jobs for a customer, the report shows subtotals for each job. The Act. Cost column shows the costs incurred for each customer or job. If you use QuickBooks payroll, the cost amounts include salary and wages assigned to specific jobs. If you also set up QuickBooks to include payroll expenses pro-rated by job, the report includes those expenses as costs. The Act. Revenue column shows the revenue recorded from each customer and job. The ($) Diff column shows the difference between costs and revenues. To see a list of the transactions that make up an amount, double-click the amount. The Detail version of the report is similar but displays all the detail without drilling down. Job estimates vs. actuals report This report shows how accurately costs and revenues for the customer or job were estimated and can also be used as an ongoing tool to indicate amount that can be spent. The report compares estimated and actual costs and estimated and actual revenues for each item billed. The Est. Cost and Act. Cost columns compare the estimated cost to the actual cost for each item billed. If you use QuickBooks payroll, the costs include salary and wages assigned to the job. If you also set up QuickBooks to include payroll expenses pro-rated by job, the report includes those expenses as costs. The Est. Revenue and Act. Revenue columns compare estimated revenue to actual revenue from each item billed. The ($) Diff columns show the difference between the estimated and actual amounts. A negative amount in this column means that the estimate was too high; a positive amount means that the estimate was too low. To see a list of the transactions that make up an amount, double-click the amount. The Detail version of the report is similar but displays all the detail without drilling down.

10 Unbilled Costs by Job This is a useful report to check that all costs that have been indicated as billable to the customer have been invoiced Profit & Loss by Job This report is in the standard P&L format so is based on accounts. It shows one column per job and is based on Actuals only ie not estimates. If budgets have been entered these can be displayed on the report after Modifying the report. Open Purchase Orders by Job This is a useful report to check on any outstanding purchase orders by job