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. Many people mistakenly think that QuickBooks cannot do Job Costing. On the contrary, it actually does it rather well. Here is a brief overview of how to do Job Costing in QuickBooks. Keeping in mind that it can be more robust that what’s listed here but that may be better suited for training in a one on one session vs. just a friendly blog post
**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 allows 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. (Example, Ashley Wallace is your customer and the jobs would be her Kitchen, her Bathroom and her Roof.)
**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.
**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 timesheet. Overhead expenses that aren’t specific to a job can be assigned to a “dummy” job or just left blank. HINT: You can use the ‘Expenses Not Assigned to Jobs’ report to check that you haven’t missed any expenses.
**Enter your estimates in QuickBooks.
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.
**Create invoices in QuickBooks and choose the right Customer:Job on the invoice form.
**Use the QuickBooks job cost reports to learn how your business is doing on a job-by-job basis.