Job Costing QuickBooks Style
Can QuickBooks Job Costing Be Done? Yes! Can it be done incorrectly? Yes!
Here are some helpful tips when setting up Job Costing. What does Job Costing actually mean? It means you are assigning specific costs to a certain job or customer. You want the ability to track that job and see how profitable it is.
Here are my 12 tips when incorporating job costing.
- If you are using jobs or sub-jobs, each one should have its own Estimate; the Estimate that you create at theJoblevel should be for the Original Contract, whereas the Estimate that you create at the Sub-Job level should only be for the items that are specific to the change order/extra work order. This helps for accurate reporting.
- When adding change orders, never change the original estimate, you lose all tracking and documentation.
- Check your chart of accounts to make sure you have direct costs under “costs of goods sold” category and your general and administrative expenses listed under “expenses.” For job costing purposes, we are only concerned with costs that are specific to a job.
- Compare your “Item Lists” to ensure cost codes are set-up double-sided, having a Purchase and a Sales Price.
- When entering a bill or writing a check use the “Item” tab and not the “Expense” tab.
- If you are not using QuickBooks payroll, you will need it for job costing to be accurate and efficient. Otherwise, using an outside payroll company will be very labor intensive to import all the transactions and details you need.
- Using the weekly timesheet feature in QuickBooks it be a big time saver and will automatically transfer time into the payroll portion.
- Do you have Equipment Costs? Make sure you are accounting for this in the job-costing part.
- If you are not using QuickBooks Purchase Orders, review this option to track committed costs, material purchases, and subcontracts.
- Create Estimates that reflect the Schedule of Values using the Cost Codes you create in your Items List and then use the Progress Invoicing feature to generate the base billing.
- There is a little-known way inside QuickBooks to track automatically by job your liability insurance and worker’s compensation expenses. If interested please contact me!
- Get everyone trained and on board with job costing. This can be the one financial report that will be vital to your organization.
Job Costing is an ongoing process, review and monitor on a regular basis to ensure successful reporting.
Interested in setting up Job Costing for your business? Contact me today.Contact Me