How to Track Job Costs in Quicbooks
Whether your business sells a product or service, you’ll probably to spend money to make money. Therefore, it’s important that you track your business’s job costs. By closely monitoring your job costs, you can see exactly how much money your business spends to produce the products or services that it sells. If this number is too high, it will result in a lower return on investment (ROI). In fact, some businesses experience a negative ROI, indicating that they spend more money to produce their products or services that the amount for which those products or services are sold. Using Quickbooks, you can easily track your business’s job costs in just a few simple steps.
To track job costs in Quickbooks, you’ll need to create a unique “job” for each customer in Quickbooks. This will allow you to create custom job costs for each customer. After doing do, you can access the “Customer:Job” column column in your Quickbooks account to enter an expense. In this column, you’ll see a few basic fields. The billable time field, for example, refers to the numbers of hours that your business spent performing the job for the respective customer.
There’s also the job-related purchases field, which refers to products or services that your business purchased (not sold) for the purpose of selling its own products or services to the customer. You can use a bill or credit card to record job-related purchases. For the “Items” tab here, enter products or services that your business purchased to perform the job. Just remember to assign each item to the customer.
For the overhead expenses field, you’ll want to enter overhead expenses associated with the sale of the product or service to the customer. What is overhead exactly? Overhead refers to ongoing, indirect expenses associated with running a business. Examples of overhead expenses include rent, utilities and office supplies. While overhead expenses are typically less than direct expenses, it’s still important to track them as a job costs.
Some businesses may also want to record mileage as a job cost. If you or someone who works for your business has to drive to deliver the product or service to customers, then you should calculate and track mileage. Quickbooks will display an “Enter Vehicle Mileage” window, which you can use to track the number of miles driven to complete the job.
Did this tutorial work for you? Let us know in the comments section below!