BuildYourNumbers.com covers item list techniques, samples, questions, insights & time savers to tailor your QuickBooks job costing system to your needs.
Exactly what do businesses need when it comes to QuickBooks job costing? Diane shares:
- The info that business owners, managers, and supervisors have consistently indicated that they find to be most useful to help manage and track job costs and progress –
and - How you can access and utilize the Item List to meet their needs (both summary and detailed job-cost accounting and reporting).
Regardless of your industry – construction, job shop manufacturing, or service provider – you’ll discover the varied and useful roles that Items play within your accounting system. You’ll achieve a deeper understanding of how Items can be creatively structured to build the all-important Job Profitability Detail and Job Estimates vs. Actuals Detail reports (information that owners find to be essential as they monitor week-to-week job-cost progress and profitability).
Diane also helps you save time – and bypass frustration – by pointing out 2 setup options to avoid (because they DON’T provide the best long-term results) – and illustrates the alternative approach that nearly always “delivers the goods”. She will guide you through examples, provide questions you’ll need to ask, and share thoughts to keep in mind as you develop your QuickBooks job costing system. Whether you’re starting from scratch or enhancing an existing company file, you’ll find both insights and time savers to make your experience of creating the underlying details for a QuickBooks job costing system both smooth and rewarding.
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Covering topics like:
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Preview of Secret to Quickbooks Job Costing
Watch a preview of this in-depth explanation of Item Lists in Quickbooks.
To view in full-screen mode: After the video starts, click the ‘box’ icon
at the bottom right-hand corner of the video (to the right of the speaker icon).
Video Transcript at Bottom of PageVideo Transcript at Bottom of Page
The Item List: Secret to QuickBooks Job Costing (1600/Level 1)
Approximately 72 minutes:
Highlights From Secret to Quickbooks Job Costing
- What owners tell us they want from job-costing
- What you don’t want to do and why
- The flexible Item
- The nature of Items
- Reports arising from Items
- The rules of Items
- 5 Most commonly used Items and application
- General notes about Items
- 5 Other types of available Items
- Item-based reporting and list-building decisions
- Establishing the individual Items that you’ll need
- Review of a sample company’s Item List
- Practical applications for list-building
- Processes you’ll want to track
- Decisions you’ll need to make
- Ordering and grouping Items
- Re-working a scrambled-up Item list
- Timesaving tips
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The Item List: Secret to QuickBooks Job Costing (1600/Level 1)
Diane Gilson: Welcome, today we’re doing the real secret behind detailed job costing and you’ll see our little character in the lower right-hand corner, who’s looking very Zen and happy with what he’s doing and hopefully that’s going to tie in with our ‘going with the flow’ concept that we’re working with today. We’re going to be focusing on the flexible Item. This is one of the big secrets to job costing in QuickBooks and there are a lot of different aspects to this. We’ve got a lot of material to cover, so I’m going to just move right along.
- First of all we’re going to cover what owners want from their job costing systems. That comes from my years of experience of working with people and finding out what it is they really want to know about their company’s job costs.
….. - Then some approaches that you don’t want to use – some of which we’ve learned through hard experience and others we’ve seen other people try and not get the best results. I think it’s good to explain to you why those particular approaches aren’t the most effective approaches to use.
….. - We’re going to be looking at the inner nature of items, again that Zen theme today, trying to make things run smoothly in all of our systems, and work well together.
….. - It’s about creating the Items that will actually work for YOU and for your particular company.
….. - We’re going to look at some item based reports, maybe something a little different than what you’ve been used to looking at from prior sessions and
….. - Looking at the possibilities of all the different kinds of things that we can do with Items.
….. - And we’ll wrap up with a little bit of relaxation. I don’t have any Zen music going in the background but we can all kind of put ourselves in that relaxation stage and see if we can save a little bit of time so we have just a little bit more relaxation and personal time in our lives.
We’re going to use our PDF approach today and start with some thoughts here on what owners usually want or need to see in order to control their job costs. Of course, you’re going to want to check in and confirm with them, to make sure that this is actually on target for your company, but this I think is going to be a good place for you to jump off and get started.
So, as far as actual costs go, usually, they want to see some job stage cost roll-ups and they want to be able to see big picture numbers for labor, their labor burden pool, and allocations that are related to that. They want to see what they’re spending on materials, on sub-contractors, and of course, you have to keep materials and sub-contractors segregated there – and even from the term labor – because when we talk about labor we’re talking about internal employees. So even though you may be getting sub-contractors to provide some of your labor, we need to keep those sub-contractor costs segregated out for 1099’s – and all sorts of other job costs.
Sometimes the owners also want to pick up heavy-equipment-cost assignments, customer allowances (that should actually have a little bullet in front of it, but that is the second thing there in the list), if they’re tracking customer allowances, as well as detailed variances from purchase orders, and that can be handled at a very detailed level as well.
Also in many cases they either want or should be looking at time reports so that they can see actual time vs. estimated time, and they need accurate results on a timely basis. When they look at time reports, they don’t want to see that their labor costs are going ‘sideways’ two or three weeks after the fact, so by using the Items that we’re going to be talking about today, you can actually get those types of reports.
Additionally, they usually want to see some estimates and variances from estimates and of course, everybody’s looking at that gross profit by job number. And to kind of wrap things up on the expense side, staying on top of controlling costs with purchase orders, and to be able to see open purchase orders by job to see what’s out there and is outstanding.
Okay, let’s talk about a few things that you don’t want to do and why.
- So first of all, you don’t want to use the Chart of Accounts for your job stages. Half a dozen reasons here: first of all it creates a really long, one-dimensional Chart of Accounts. It used to be that we couldn’t do a lot of job costing in any way other than the Chart of Accounts, and so people tried to build these really elaborate Charts of Accounts that would help them do their job costing. We don’t need to do that in QuickBooks! In QuickBooks, in our Chart of Accounts, we just kind of want to keep those big picture accounts like I mentioned, labor, sub-contractors, materials, other job costs – and of course we can have more detail in our Cost of Goods Sold area that that…