How to Track Job Costs in QuickBooks Desktop

Before you start

• Job costing means tracking what you spend on a job and comparing it with what you bill. Every cost and every invoice for the job needs the same Customer:Job.
• Give each item enough detail. Intuit says your job cost reports can only be as precise as your Item List.
• To use estimates, sign in as the Admin and go to Edit > Preferences > Jobs & Estimates > Company Preferences. Answer Yes to Do you create estimates?
• Allocating overhead to jobs is optional. Intuit asks you to speak to your accountant before you change your company file for it.

To split profit by plant, warehouse or product line rather than by job, we suggest classes instead. See how to set up class tracking.

Step 1: Set up a Customer:Job for each job

Intuit suggests a separate job even when a customer has only one. Income and costs then stay split job by job, and your bookkeeping is simpler if that customer gives you a second job later.

1. 1Go to Customers > Customer Center.
2. 2Select the customer.
3. 3Choose Add Job from the drop-down at the top left.
4. 4Enter the Job Name, then select OK.

You can also add a job as you work. On an estimate, open the Customer:Job dropdown and select Add New if the job isn't listed yet.

Step 2: Assign every cost to the job

Choose the job in the Customer:Job column whenever you enter a bill, check, credit card charge or timesheet. Intuit sorts job costs like this:

• Items and subcontracted services bought for the job: use a bill, check or credit card charge. On the Items tab, enter each item or service and assign it to the job.
• Freight, postage and other expenses: use the Expenses tab of a bill, check or credit card charge, and assign each line to the job.
• Time: record hours on a weekly timesheet or as a single activity, assigned to the customer or job. QuickBooks checks the Billable column on each entry.
• Mileage: record it in the Enter Vehicle Mileage window. To charge the customer more than the standard rate, change the amount on the invoice.
• Overhead: only if you choose to allocate it, and after talking to your accountant.

Timesheets don't post to your books. Intuit says time reaches the Job Profitability and company financial reports only after you bring it onto a bill or invoice.

For the forms themselves, see how to enter and pay bills and how to enter and reconcile credit card charges.

Payroll costs by job

If you run QuickBooks Desktop Payroll, Intuit's payroll article adds these settings:

1. 1Go to Edit > Preferences > Accounting > Company Preferences and make sure Use class tracking for transactions is selected.
2. 2Select Payroll & Employees, then Company Preferences. Select Job Costing, Class and Item tracking for paycheck expenses.
3. 3Choose whether to track by Entire paycheck or Earnings item, then select OK.
4. 4For additions, deductions and company contributions, go to Lists > Payroll Item List. Right-click each item and select Edit Payroll Item. Select Track Expenses by Job, then select Next until you can select Finish.
5. 5On each paycheck, choose the job in the Customer:Job column of the earnings section and enter the hours or pay.

Intuit notes that turning on Track Expenses by Job only affects future transactions.

Step 3: Enter the estimate

1. 1Go to Customers > Create Estimates.
2. 2In Customer:Job, choose the job.
3. 3Fill in the Date and Estimate #.
4. 4Add the items you expect to supply. QuickBooks fills in each description and amount from the item setup, and you can change them.
5. 5Select Save & Close.

If you price jobs in a spreadsheet, Intuit says you can record just a summary estimate in QuickBooks. Some job reports work without estimates. Entering them unlocks the full set and shows how accurate your quotes were.

One catch: if the same time or expense is on the estimate and also on a timesheet or bill, pick one to put on the invoice. QuickBooks won't match the two for you.

When the customer accepts, you can turn the estimate into a sales order. See how to turn an estimate into a sales order.

Step 4: Invoice the same Customer:Job

• Choose the job, not just the customer, in Customer:Job on each invoice.
• If you create invoices outside QuickBooks, enter at least a summary of each one. Otherwise its revenue is missing from the Job Profitability reports.

Step 5: Run job cost reports

Go to Reports > Jobs, Time & Mileage. Intuit's report articles point to these:

• Job Profitability Summary: which jobs make money and which don't. Intuit's payroll article has you double-click a job's amount to see the payroll costs behind it.
• Job Profitability Detail: QuickBooks asks which customers to include. To see only paid invoices, set the Paid Status filter to Closed. Intuit notes they're listed by invoice date, not by the date paid.
• Estimates by Job: active estimates for each customer or job. Add the Open Balance column with Customize Report to see what's outstanding.

Intuit's item reports article also describes Item Estimates vs. Actuals. It compares estimated and actual cost and revenue for each item you sell.

Include inventory adjustments on a job

1. 1Go to Reports > Jobs, Time & Mileage > Job Profitability Summary.
2. 2Select Customize Report and open the Filters tab.
3. 3Choose the Accounts filter and select All Accounts.
4. 4Select OK. Memorize the report if you'll run it again.

See job status and dates

1. 1Go to Reports > List > Customer Contact List.
2. 2Select Customize Report.
3. 3On the Display tab, add Job Status, Estimate Total, Start Date and Projected End. Add Balance Totals to see invoice balances.
4. 4Remove the columns you don't need, set filters, then select OK.

More job reports by edition

• Premier Contractor Edition and Accountant Edition: Reports > Industry Specific > Contractor Reports. Intuit's examples include Job Cost by Vendor Summary and Cost to Complete by Job Summary.
• Enterprise: Invoice Profitability by Customers, under Reports > Customers & Receivables. In Intuit's comparison, Job Profitability follows a job's income and costs over its whole life. Invoice Profitability shows profit invoice by invoice.

To see profit by item instead of by job, see the Item Profitability report.

Make-to-order manufacturing: what the articles cover

Intuit's job costing article doesn't mention manufacturing, assemblies or builds. Here is what the other Desktop articles cited here do support:

• Items or outside work bought for one customer's order can go on the Items tab of the bill, assigned to that Customer:Job.
• A non-inventory part can be marked as purchased for and sold to a specific customer:job. That adds purchase and sales details to the item.
• A service item done by a subcontractor can carry a cost and an expense account once you select its subcontractor option.
• An inventory adjustment can carry a customer, job or class. Job Profitability Summary picks it up with the Accounts filter set to All Accounts, as in Step 5.
• None of these articles explains how assembly builds feed job reports. We suggest asking your accountant how to cost built items before you rely on those reports.

Common problems

• A job looks more profitable than expected: look for bill, check or charge lines with no job. Intuit says to assign all expenses to jobs for a complete picture.
• Hours are missing from Job Profitability: timesheets don't post. Add the time to a bill or invoice.
• Revenue is missing: invoices made outside QuickBooks need at least a summary invoice inside it.
• Inventory adjustments don't show: set the Accounts filter on Job Profitability Summary to All Accounts.
• Buying an item later at a new price doesn't change the cost on existing invoices. Intuit says that cost is a snapshot taken when the invoice was created, and Job Profitability works the same way.
• Older paychecks aren't split by job: Track Expenses by Job only affects future transactions.

Where QuickBooks Desktop leaves the work to you

• Someone has to choose the right job on every bill line, charge, timesheet and invoice.
• Whether and how to allocate overhead is a decision for you and your accountant.
• Timesheet hours have to be moved onto a bill or invoice before they count.
• When time or costs sit on both the estimate and a timesheet or bill, someone has to pick which goes on the invoice.
• Report settings, such as All Accounts for inventory adjustments, have to be set and memorized by hand.