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Track Job Costs in QuickBooks

Job cost tracking is an extremely important part of a contractor's business. Job costing means tracking the expenses for a job and then comparing those expenses to the job's revenue. This tells you which jobs are making money and which are not.
 
With the QuickBooks job costing tools you can easily see exactly how much money you spent—and made—on each of your jobs. You won't have to wait until you do your taxes at the end of the year to see how your business is doing. Plus, you'll be able to see which types of jobs are winners and which are losers, so you'll know which jobs to take in the future.

Job costing in QuickBooks can also help you estimate more accurately. Estimating may be the most important—and most difficult—part of running a contractor business. But unless you compare your estimated costs to your actual costs after the work is complete, you have no way to know if you are estimating too high or low, and no way of improving your ability to estimate in the future. The QuickBooks job cost reports make it easy for you to compare your estimated costs to actual costs.

Detailed instructions

Job costing in QuickBooks is easy. You are probably already entering most, if not all, of the information you need into QuickBooks. If you follow a few simple steps, full job cost reports will be at your fingertips whenever you need them. (The QuickBooks Premier Contractor Edition gives you additional reports for Job Costing.)

  1. Set up a Customer:Job for each of your jobs.
    • Even if you have only one job for a particular customer, it's a good idea to set up an individual job for that customer. This enables you to keep track of your income and expenses on a job-by-job basis, and it can simplify your bookkeeping if you add another job for that customer in the future.
    • If you have previously recorded transactions to the Customer, QuickBooks moves those transactions into Job 1 when you create a job.
       
  2. Set up your items to optimize for job costing.
    The level of detail in your Item list determines the level of detail in your job cost reports.
     
  3. Assign all your expenses to jobs.
    To get a complete job cost picture, make sure to assign all your expenses to jobs. QuickBooks makes this easy—simply make sure you select the appropriate job in the Customer:Job column whenever you enter a bill, check, or time sheet. Overhead expenses that aren't specific to a job can be assigned to a "dummy" job, as described in the link above.
     
    • For billable time: Record the hours spent on the job, using either a weekly time sheet or a single activity entry. Assign the hours to the customer or job (if you're tracking by job). Each entry will automatically be checked in the Billable column on the form. Note: Time sheets are a non-posting entry. Time must be imported to a bill or invoice to be included 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 to record the purchase. On the Items tab, enter each item or service you purchased. In the Customer:Job column, be sure to assign each item or service to the customer or job (if you're tracking by job).
    • For overhead expenses: Expenses not caused by any specific job (rent, office supplies, etc.) should not be assigned to a Customer:Job. However, you might still want to see these expenses on job costing reports. To do that, create a dummy Customer:Job called "Overhead" and then assign all of your overhead costs to that fake job.
    • For mileage: Record the mileage in the Enter Vehicle Mileage window. If you want to change the amount for this expense (to charge the customer more than the standard rate), you can change it on the invoice.
    • For other expenses: (freight charges, postage, etc.) Use a bill, check, or credit card charge to record the expenses. On the Expenses tab, enter each expense. In the Customer:Job column, be sure to assign each expense to the customer or job (if you're tracking by job).
       
  4. Enter your estimates in QuickBooks.
    • You can create your estimates directly in QuickBooks. If you prefer to create estimates with a spreadsheet or outside program, you can just bring summary estimates into QuickBooks. Finally, if you create estimates outside of QuickBooks, but you create invoices in QuickBooks, you can simply enter your invoice information in the Create Estimates window and then automatically turn your estimates into invoices.
    • You can use some job costing reports without QuickBooks estimates. However, if you enter estimates in QuickBooks, you'll be able to use the full range of QuickBooks job cost reports to make sure your project budget is on track and to evaluate how accurate the estimates are and adjust them appropriately for future projects. Estimating more accurately can in turn help you make more money from each job and win more jobs in the future.
    • Note: If you enter time and expenses on estimates and also on time sheets or bills, you will need to pick one to transfer to an invoice. For example, QuickBooks will not automatically correlate time from an estimate and the same time on a time sheet when adding it to an invoice. You will have to do this manually.
       
  5. Create Invoices
    • Create Invoices in QuickBooks and choose the right Customer:Job on the invoice form.
    • If you create your invoices outside of QuickBooks, enter at least a summary of each invoice into QuickBooks so the revenue is included in the job profitability reports.
       
  6. Use the QuickBooks job cost reports to learn how your business is doing on a job-by-job basis.
    • You can use job reports in QuickBooks to learn which jobs are making money and which jobs are losing money.
    • These reports help you invoice customers, create better estimates, analyze how well each job is progressing financially, and identify problem jobs before it's too late.
       

For more detailed instructions on setting up, entering and running reports, search on Job Costing in the QuickBooks Help menu. Tutorials about job costing that can also be viewed in the QuickBooks Help menu.

If these steps do not resolve the issue, you can read discussions and post messages and questions relating to your issue on the Intuit QuickBooks Community site for free or you can contact a technical support agent for additional guidance. Fees may apply.

KB ID# HOW13339
10/26/2014 2:28:35 AM
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