How to Set up Job Costing in QuickBooks?
Job costing means expense tracking for a job and then comparing those expenses to the revenue. Job Costing in QuickBooks offers many ‘Job Costing tools’ that can help you analyze how much money you spend and make for every job.
Moreover, Job Costing appoints costs to a particular client or employment. A QuickBooks user does not need to buy an extra or some outside program. Let’s shed some more light on this topic.
What is Job Costing in QuickBooks Online?
Several businesses such as Construction firms, Professional service companies, etc. use Job Costing in QuickBooks Online to monitor the Job Costs and ensure that they are profitable on a particular job. Nevertheless, accurate QuickBooks Online job costing is a tough task to perform, but QuickBooks Job Costing simplifies this process.
Businesses opt for Job costing in QuickBooks to keep right track of where you are spending your money, and always have a first- hand information on the viability of the entire process. QuickBooks Online Job Costing ensures that you can follow each cost to make better estimates & choices in the future.
Important: For desired results consider the below points. [xyz-ihs snippet=”consult-button”]
- Search for difficult jobs
- Identify the jobs that were not as profitable as per the expectation
- Make better estimates for Next Jobs
Benefits of QuickBooks Job Costing
- Checks Project-based profitability
- Allows you to make better estimates
- Compare Budgeted costs to Real job costs
- Have full cost-control of jobs
- Evaluate team and individual performance
Steps to Set Up Job Costing in QuickBooks
Now we understand what QuickBooks Job costing and how does it help in various ways is. Next, thing in-line is to know how to set up QuickBooks Online Job Costing.
Step 1: The Initial Preferences Configuration
It is imminent that QuickBooks is correctly configured on your computer for a successful Job costing in QuickBooks Online. Perform the below-given steps-
- Select ‘Edit’ and ‘click’
- Choose Jobs & Estimates and click ‘Company’
- Under the Company preferences option, choose the appropriate modification before starting Job creation.
- Verify ‘Time and Expenses’ to know that time tracking is active when you are looking to track them on the job.
Step 2: Design Job Types
Design Job types before assigning jobs to clients. Perform the below-given steps:
- Choose ‘Lists’ and then click on ‘Customers and Vendors Profile ’
- Click Job Type list
- You will see a small window for the Job Type List with options at the bottom left-hand side.
- Next, click ‘Job Type’ and select the ‘New’ option
- You will see a new window here that says ‘New Job Type.’ Here fill in the info related to Job Type here.
- Repeat these steps for several job types and then make ‘Sub-types’ for each category. You can do this by selecting ‘New Again’ and putting the ‘Sub-type’ name.
Step 3: Set-up job for customers
Customer Jobs exist as an individual entity for which you can assign the tasks to your Clients. The steps to set-up a job for customers is:
- Right-Click on the Client option and click ‘Add Job’ option
- When the next Job window appears then put in the client’s details. Select ‘Job Info’ tab and type ‘Job name’ in the correct field.
- Select the theme/ option you want. For example ‘Tax’
- Next, select the status under ‘Job Status’ drop-down. The choices are None, Pending, In Progress, Awarded, Closed, and Non-Awarded.
- Now enter the necessary fields such as Start Date, Job Description, Projected End, or End Date.
- Select the appropriate ‘Job ’
- Choose OK when all the details are there.
You can use these details for transactions and the reports. Ensure the right job has been chosen when you are taking out an estimate or a bill for a specific job or is filtering a report.
Step 4: Producing Bills
QuickBooks can set up estimates and send dispatch bills. Additionally, you can create progress invoices during a job. Follow the below steps:
First, create an Estimate and select ‘Create Invoices’ while viewing the bills.
After that, you will see a window that gives three billing choices :
- Create Invoice for entire estimate
- Create an invoice for %age of the full estimate. Here type the percentage.
- Make invoices for selected items or the different percentages of every item
Choose one of the above options and press OK. You will have an invoice based on your selection.
Step 5: Advanced Reporting
Reports are an essential aspect of proper analysis, and Job Costing field is no different here. QuickBooks Job Costing lets you produce advanced reports so that you can decipher task performances such as Estimate accuracy, Lost/sunk costs, Time and Mileage, Productivity and Job Status.
Step 6: Estimates & Progress Invoicing
Ensure that your company uses estimates & modifies orders regularly and adequately. You can use reports to recognize several issues such as Missing Change orders, etc. You can use QuickBooks to generate invoices from the estimates depending on the percentage of the full estimate.
That is all for this article. Hopefully, it provided you useful insight and analysis on job costing in QuickBooks and its set-up process. If you are seeking any additional information, you can speak to a technical expert at the Certified ProAdvisor Support Number.