QuickBooks Online Job Costing via Class Tracking
While technically,
we’ll look at using Classes to track customer jobs.
Setting Up QuickBooks Online Job Costing
To begin, you’ll need to have a QuickBooks Online Plus subscription – Class tracking is not available in Simple Start or Essentials, and there are a couple preferences that need to be set before you can proceed. The first thing you need to do is to turn class tracking on, by going to the Company Tab, then Preferences, and choosing Categories – check the Class tracking box.
The second preference is to assign expenses to customers in Company/Preferences/Vendors & Purchases, check the Expenses and product/service tracking by customer box.
Most jobs will begin with an Estimate. You can read about how to deal with estimates and progress invoicing here, as well as receiving partial purchase orders. Once the client accepts the terms of the Estimate,
we can add the Class directly from within the Estimate by choosing Add New from the drop down menu in the Class column:
Adding the Class:
You can also set up the Class prior to creating the estimate, but my choice is to wait until after the client accepts; this way you can keep your Class list cleaner, or avoid having to delete a class if the client
doesn’t choose to accept. I find it easier to assign the Class after, because I scan the signed Estimate and attach it to the transaction in QuickBooks Online, so I have to return to it anyway. You can add the
Class as shown above, or do it from the Class List, as seen below. Find Lists in the Home tab:
Select Class List from the Lists screen.
Click the New button to add a new Class.
Then add the Class, and save it.
The last bit of setup I do is to create the budget for the job as we saw in the earlier article; only this time we’ll divide the budget by class. This is in the Company tab, under Budgets:
Select Subdivide by Classes.
Specify a budget name:
Select the Class to use for this Budget.
Working with Classes
You’ll be invoicing the client for the project and posting related expenses. Below is the invoice created from the Estimate, with a payment posted against it:
And below is a check recording the expense – just a smidgen more than what we budgeted for in this case.
Now you can create reports. Below is the Budget vs. Actual (i.e. – Estimate vs. Actual) report:
Here is a Profit & Loss by Class report:
When the job is completed, you can delete the Class from the class list, so that it doesn’t show up in lists anymore. Don’t worry, this doesn’t actually delete it, it just makes it inactive. It will continue to
show up in reporting if there is any activity in the period to which the reports are set. To “undelete” any list item, you can go to that list, select the Related Reports button, view the deleted item, and
click on that item from the report
Click on the Class you’d like to “undelete” in the report:
Then just uncheck the Deleted box and then click Save:
So now you have two options for Job Costing: The Class tracking method as shown here, or the Sub-Customer method that I described in my previous article.
Next up? Handling change orders!
Category: Cloud Accounting, Expert's Corner, QuickBooks Online, QuickBooks Tips/Tricks, Stacy's Online Solutions