Contractors need to carefully track jobs to understand their individual job profitability. Doing so also provides you with a clear understanding of work in progress (WIP). QuickBooks Desktop, a valuable toolbox for job tracking and organization, can help you maximize profitability and create better efficiencies.
Key steps to setting up your QuickBooks file for successful job costing.
Selecting the proper version of QuickBooks: While basic job costing can be done in almost any version the best one currently available for contractors is QuickBooks Contractor Edition. It’s specifically tailored to general contractors and offers unique tools and reports that are not included in other editions. QuickBooks Enterprise Edition also offers WIP tracking and committed cost tracking.
Setting up your QuickBooks file for job costing: You will need to enable several settings. From the Preferences menu, you must enable job costing, items, payroll class, and item tracking. This allows you to set up the jobs to which you’ll code your expenses and apply payroll to those jobs (if you are using QuickBooks payroll). Additionally, make sure your chart of accounts includes the revenue and cost of goods sold accounts you want to see when running reports.
Setting up jobs in QuickBooks: QuickBooks allows you to set up customer jobs and sub-jobs. Create a customer job if that’s the only work you will be performing for them. You can also set up sub-jobs if you expect to perform multiple jobs for that customer in the future. The software also allows you to include job details like status, start date, projected completion date, and other information.
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