S13 4010 CheckFixFinalizeJobCostAssignments HOT 432394
Are your job costs accurate? How to check, fix, and finalize Job cost assignments
Presented by: Diane C. O. Gilson President, Info Plus Accounting, Inc. Certified Advanced QuickBooks® Pro Advisor e-mail: [email protected] © Info Plus Accounting, Inc. Ann Arbor, MI 48104 web: www.BuildYourNumbers.com + www.InfoPlusAccounting.com
This session : Double-checking your work…
Getting to the REAL results… Account-based reports for jobs Item-based reports Common problems that need to be fixed
copyright: Info Plus Accounting, Inc. - All rights reserved
Are your job costs accurate? How to check, fix, and finalize job cost assignments… Part of month‐end procedures… More closing procedures in other classes.
Account‐based reports:
To begin the review: Close all windows In View, choose Multiple Windows Create P&L for Company report for desired date range ‐ expanded Create P&L by Job for desired date range ‐ expanded Go to Window. Choose Tile Vertically. For consistency: Place P&L by Co report on the left side of the screen, and P&L by Job on the right.
Common problems with Income o Money from bank loans or draws related to company loans Fix: Reclassify to loan accounts o Money deposited from customers w/no name Fix: View the “From” column as Customer:Job o Bank deposits – Refunds entered as income w/vendor name in “from” column “Fast fix” Related problems True Fix: Refunds received and deposited to bank s/be entered on $0 checks as shown below. Already reconciled? Change offset and deposit to Clearings account. o Income included not related to primary purpose of company Fix: Re‐assign account or transaction to “Other income” area Common problems with COGS: o Job costs not assigned to jobs Fastest way to locate when $ are different About how far off? Double click on P &L by Co Add source name Expand Sort by name Find transactions without name and fix Match to totals o Discounts not assigned to jobs Fix #1: Delete the discount taken and reduce the cost of individual line items Fix #2: Delete the discount taken and enter the discount as an Item offset with a job (actual or NJS) Fix #3: Create a $0 check to move from “No job” to “NJS” or other correct job. Example…
© Info Plus Accounting (may not be used or re-printed without permission)
Page 1
Are your job costs accurate? How to check, fix, and finalize job cost assignments… Payroll and related expenses: “Other Payroll Items” (see paycheck detail) not assigned to job, e.g.: Bonuses Employee reimbursements on payroll checks not assigned to jobs. E.g., mileage, tools, etc. Rounding fixes not assigned to jobs Fix: Create a $0 check to move from “No job” to “NJS” or other correct job. Example… Company contribution Payroll Items not marked as “Track Expenses by Job” To fix future issues: Go back to Payroll Item and check the box. To fix prior issues: Create $0 check as shown above o Payroll taxes not assigned to jobs (even when all direct payroll has been)… All payroll taxes (should) be posting into COGS account type(s) ALL payroll needs to be assigned to jobs in order for payroll taxes to show up so they can be moved to the correct non‐COGS accounts ALL payroll should also be assigned to a Service Item to avoid “No Item”, so add Service Items if needed. Add special jobs for TBD NJS Equipment (if applicable) Sales Admin Owner Fix: Locate remaining checks without job cost assignments and add jobs and Service Items. Print Payroll Summary for each payroll period affected as a “safety reference”. You will need to unlock individual paychecks to change. Confirm after change that taxes and net paycheck did not change. o Indirect production and labor burden costs not assigned to jobs All costs in COGS MUST have a job assigned Fix: Assign indirect and labor burden to NJS Common problems with expenses o Expenses: Job costs assigned to company overhead accounts. E.g., Utilities Repairs & Maintenance Real estate taxes Sales tax or use tax expense Legal Interest Sometimes: Postage & delivery Fix: re‐assign to correct Item and job o
© Info Plus Accounting (may not be used or re-printed without permission)
Page 2
Are your job costs accurate? How to check, fix, and finalize job cost assignments…
To finish the account‐based cleanup o Double‐check to see that Gross Profit matches between reports. o If it doesn’t, look at each line item to determine what has NOT been assigned to a job and fix it. o When the Gross Profit matches between reports, you’re done with the account‐based review. o Then move to the Item‐based Reports.
Item‐based Reports
Locate and fix “No Items” for all jobs o Create a Job Profitability Detail Report for one job o Modify report/Filter tab. Select Name. Choose Multiple Names Click off all Customer: Jobs that are current, then OK o Look at bottom of report to find if there are amounts showing for “No Item” o If no, you shouldn’t see any No Item results on individual reports. o If yes, drill down to see the transactions. The only transactions that are OK to be there are Percentage of Completion or Work in Process Journal entries that have been entered and reversed for the same amount. All others need to be modified to include Items if it’s a job that you want to see Item‐ based reports for.
Check results on individual reports for jobs that are currently open: o Create an Estimate vs. Actual detail report for each job that is currently open OR if no Estimates have been entered, a Job Profitability Detail report (on screen display will probably work best as you can drill down to review anything that doesn’t look right). o Determine that results are in the correct “Cost” or “Income” columns. o Determine that all applicable costs have been entered. E.g., has a job “closed” this month? Are there outstanding Bills or future remaining costs that haven’t yet been entered? (A good place to check is the Estimate vs. Actuals Difference column, and/or – if you’re using POs – the Open Purchase Orders by Job report.) If missing costs or Invoicing, be sure to get them in – even if not quite perfect. You can add an additional Bill or Credit for the difference when the final charges from the vendor show up. o Determine that actual costs/income entries have been entered to the correct Item E.g., the Estimate says that the cost is for a contracted service, but the actual shows it as employee labor. Correct as needed. o Determine that overall results appear to be reasonable.
© Info Plus Accounting (may not be used or re-printed without permission)
Page 3
Presented by: Diane C. O. Gilson President, Info Plus Accounting, Inc. Certified Advanced QuickBooks® Pro Advisor e-mail: [email protected] © Info Plus Accounting, Inc. Ann Arbor, MI 48104 web: www.BuildYourNumbers.com + www.InfoPlusAccounting.com
This session : Double-checking your work…
Getting to the REAL results… Account-based reports for jobs Item-based reports Common problems that need to be fixed
copyright: Info Plus Accounting, Inc. - All rights reserved
Are your job costs accurate? How to check, fix, and finalize job cost assignments… Part of month‐end procedures… More closing procedures in other classes.
Account‐based reports:
To begin the review: Close all windows In View, choose Multiple Windows Create P&L for Company report for desired date range ‐ expanded Create P&L by Job for desired date range ‐ expanded Go to Window. Choose Tile Vertically. For consistency: Place P&L by Co report on the left side of the screen, and P&L by Job on the right.
Common problems with Income o Money from bank loans or draws related to company loans Fix: Reclassify to loan accounts o Money deposited from customers w/no name Fix: View the “From” column as Customer:Job o Bank deposits – Refunds entered as income w/vendor name in “from” column “Fast fix” Related problems True Fix: Refunds received and deposited to bank s/be entered on $0 checks as shown below. Already reconciled? Change offset and deposit to Clearings account. o Income included not related to primary purpose of company Fix: Re‐assign account or transaction to “Other income” area Common problems with COGS: o Job costs not assigned to jobs Fastest way to locate when $ are different About how far off? Double click on P &L by Co Add source name Expand Sort by name Find transactions without name and fix Match to totals o Discounts not assigned to jobs Fix #1: Delete the discount taken and reduce the cost of individual line items Fix #2: Delete the discount taken and enter the discount as an Item offset with a job (actual or NJS) Fix #3: Create a $0 check to move from “No job” to “NJS” or other correct job. Example…
© Info Plus Accounting (may not be used or re-printed without permission)
Page 1
Are your job costs accurate? How to check, fix, and finalize job cost assignments… Payroll and related expenses: “Other Payroll Items” (see paycheck detail) not assigned to job, e.g.: Bonuses Employee reimbursements on payroll checks not assigned to jobs. E.g., mileage, tools, etc. Rounding fixes not assigned to jobs Fix: Create a $0 check to move from “No job” to “NJS” or other correct job. Example… Company contribution Payroll Items not marked as “Track Expenses by Job” To fix future issues: Go back to Payroll Item and check the box. To fix prior issues: Create $0 check as shown above o Payroll taxes not assigned to jobs (even when all direct payroll has been)… All payroll taxes (should) be posting into COGS account type(s) ALL payroll needs to be assigned to jobs in order for payroll taxes to show up so they can be moved to the correct non‐COGS accounts ALL payroll should also be assigned to a Service Item to avoid “No Item”, so add Service Items if needed. Add special jobs for TBD NJS Equipment (if applicable) Sales Admin Owner Fix: Locate remaining checks without job cost assignments and add jobs and Service Items. Print Payroll Summary for each payroll period affected as a “safety reference”. You will need to unlock individual paychecks to change. Confirm after change that taxes and net paycheck did not change. o Indirect production and labor burden costs not assigned to jobs All costs in COGS MUST have a job assigned Fix: Assign indirect and labor burden to NJS Common problems with expenses o Expenses: Job costs assigned to company overhead accounts. E.g., Utilities Repairs & Maintenance Real estate taxes Sales tax or use tax expense Legal Interest Sometimes: Postage & delivery Fix: re‐assign to correct Item and job o
© Info Plus Accounting (may not be used or re-printed without permission)
Page 2
Are your job costs accurate? How to check, fix, and finalize job cost assignments…
To finish the account‐based cleanup o Double‐check to see that Gross Profit matches between reports. o If it doesn’t, look at each line item to determine what has NOT been assigned to a job and fix it. o When the Gross Profit matches between reports, you’re done with the account‐based review. o Then move to the Item‐based Reports.
Item‐based Reports
Locate and fix “No Items” for all jobs o Create a Job Profitability Detail Report for one job o Modify report/Filter tab. Select Name. Choose Multiple Names Click off all Customer: Jobs that are current, then OK o Look at bottom of report to find if there are amounts showing for “No Item” o If no, you shouldn’t see any No Item results on individual reports. o If yes, drill down to see the transactions. The only transactions that are OK to be there are Percentage of Completion or Work in Process Journal entries that have been entered and reversed for the same amount. All others need to be modified to include Items if it’s a job that you want to see Item‐ based reports for.
Check results on individual reports for jobs that are currently open: o Create an Estimate vs. Actual detail report for each job that is currently open OR if no Estimates have been entered, a Job Profitability Detail report (on screen display will probably work best as you can drill down to review anything that doesn’t look right). o Determine that results are in the correct “Cost” or “Income” columns. o Determine that all applicable costs have been entered. E.g., has a job “closed” this month? Are there outstanding Bills or future remaining costs that haven’t yet been entered? (A good place to check is the Estimate vs. Actuals Difference column, and/or – if you’re using POs – the Open Purchase Orders by Job report.) If missing costs or Invoicing, be sure to get them in – even if not quite perfect. You can add an additional Bill or Credit for the difference when the final charges from the vendor show up. o Determine that actual costs/income entries have been entered to the correct Item E.g., the Estimate says that the cost is for a contracted service, but the actual shows it as employee labor. Correct as needed. o Determine that overall results appear to be reasonable.
© Info Plus Accounting (may not be used or re-printed without permission)
Page 3
