Job costing basically means tracking the expenses for a job and making a comparison in those expenses to your income. QuickBooks comes with job costing tools that allow you to check the amount of money you spend and earned for each job.
The steps provided in this article will allow you to check whether you have an accurate record of your job costs or not.
Every item should be provided all the required info. The level of detail in your Item List will tell you the importance of your job cost reports.
How To Track Job Costs In QuickBooks?
Step 1: Set Up A Customer:Job For Each Of Your Job
- You have to set up job for each customer even if you have. Doing this will allows you to keep a track of all your income and expenses on a job-by-job basis and you will be able to simplify your bookkeeping in case if you add another job for the same customer.
- If you some previously recorded transactions to the customer, QuickBooks will automatically move all those transactions in Job 1 while creating a new job.
Step 2: Set Up Your Items To Optimize For Job Costing
You need to assure that you set up each item with all the required information. The level of detail in your Item List will tell you the importance of your job cost reports.
Step 3: Assign All Your Expenses To Jobs
If you want to get a complete job cost picture, you need to assign all your expenses to jobs. Whenever you enter a bill, check, or time sheet, you need to choose the appropriate job in the Customer:Job column.
- For billable time: Record the hours spent on the job by using a weekly timesheet or a single activity entry. You need to set hours to the customer or job as well and every entry will get checked in the Billable column on the form automatically. Note: Timesheets are a non-posting entry. You have to import time to a bill or invoice to include it in the Job Profitability or Company Financial Reports.
- For job-related purchases: (items purchased for a job, subcontracted services) Use a bill, check, or credit card charge for recording the purchase. Enter each item or service you purchased in the Items Make sure to assign each item or service to the customer or job In the Customer:Job column.
- For overhead expenses: As expenses are not caused due to any specific job (rent, office supplies, etc.) and it should not be assigned to a Customer:Job. However, if you still want to see those expenses on job costing reports you need to create a dummy Customer:Job called “Overhead” and then you have to assign all your overhead costs to that fake job you created.
- For mileage: You need to record the mileage in the Enter Vehicle Mileage In case, if you want to make any kind of changes in the amount for this expense, you can simply change it on the invoice.
- For other expenses: (freight charges, postage, etc.) Use a bill, check, or credit card charge for recording the expenses. Enter each expense on the Expense Make sure to enter each expense to the customer or job In the Customer:Job column.
Step 4: Enter Your Estimates In QuickBooks Desktop
- You have the option to create your estimated in or outside QuickBooks Desktop. You can just record summary estimates into QuickBooks if you want to create estimates with a spreadsheet or outside QuickBooks.
- If the estimates are created outside the QuickBooks software but you created invoices in QuickBooks then you can just enter your invoice information under the Create estimate window and convert your estimates into QuickBooks.
- Some job costing reports can also be used without even recording estimates in QuickBooks. Entering estimates in QuickBooks will help you to use the entire Job Cost reports to ensure that your budget project is on track. You are also allowed to evaluate the accuracy of your estimated and adjust them properly for future projects.
Note: Entering time and expenses on estimates and also on timesheets or bills, will require you to select one for transferring to an invoice. For example, QuickBooks Desktop never correlate time from an estimate and the same time on a timesheet while adding it to an invoice.
Step 5: Create Appropriate Invoices
- You have select the correct Customer: Job while creating an invoice.
- If you are creating invoices outside QuickBooks then you must enter a summary of each invoice into the QuickBooks so the revenue is included under the Job Profitability reports. Learn How To Create An Invoice From An Estimate In QuickBooks.
Step 6: Run Job Costing Reports To See How Your Business Is Doing On A Job-By-Job Basis
The job reports can be utilized to identify which job is profitable for you and which is not. It will allow you to create better estimates, analyze how your job is progressing financially and find out issues in the jobs easily.
If you want to access various job reports, go to Reports > Jobs, Time, & Mileage. QuickBooks Premier Contractor Edition and Accountant Edition provides you a wide range of job costing reports that can be accessed from Reports > Industry Specific > Contractor Reports.
Technical Support For QuickBooks
Hopefully, you find this article helpful and you have a clear idea about tracking job costs in QuickBooks Desktop. It can be a bit complex process if you are new to QuickBooks or you don’t use QuickBooks very often. If you are facing any issue in tracking job costs in QuickBooks or you are facing any other issue in the QuickBooks software then you can contact us at our toll-free QuickBooks Support Phone Number +1800-567-0425 to get an instant solution for your issues.