Show/Hide All
Click a question below to view the answer.
Calculations
The Job Field Report Worksheet lists the calculated percent complete to show the job's overall percent completed. The Job Analysis Report lists the calculated percent complete up to 100 percent, to show how complete the job is in terms of the revised estimate.
The Job Field Report Worksheet is a worksheet that job supervisors can take to the field and use to write in the actual percent complete. This information is later entered into the system using Job Field Report Entry. The Actl % Complete field shows the job's overall calculated percent complete. This percentage is based on the actual costs compared to the estimated costs for the cost codes the user selects to print. The job supervisor can refer to this overall calculated percent complete as they estimate each cost code's actual percentage of completion (which may be over or under 100 percent on a "cost code by cost code" basis).
The intention of the calculated percent complete information on the Job Field Report Worksheet is to show the job's overall percent completed; if there are cost overruns, this percent will be greater than 100.
The Job Analysis Report lists the calculated percent complete up to 100 percent, to show how complete the job is in terms of the revised estimate. The Job Analysis Report provides detailed billed-to-date and cost-to-date information recapped by either cost type or phase. This report shows either the Actual % Complete or the Calc % Complete field. The actual percent complete appears if there are job field entries for the job or an actual percent complete was directly entered in the Job master file; otherwise, the calculated percent complete appears. If the calculated percent complete appears, it never shows more than 100 percent because a job can never be more than 100 percent done.
The intention of the calculated percent complete information on the Job Analysis Report is to show how complete the job is in terms of the revised estimate; therefore, when the job-to-date costs have reached 100 percent of the revised estimate, the job's cost is complete.
Overhead can be calculated as a percentage of direct costs. The overhead rate can be specified for each job type and cost type in Overhead Rate Maintenance. Overhead calculation can be made on all cost postings from all sources, including calculated burden.
The actual calculation and posting can be made on a daily or monthly basis by selecting Daily or Monthly in the Apply Overhead on a Daily or Monthly Basis field in Job Cost Options. To obtain accurate cost information from Job Cost reports on a daily basis, select Daily. To analyze Job Cost reports on a monthly basis, select Monthly. The Monthly option allows you to save time and disk space by not processing the overhead allocation on a daily basis. If you do not want to calculate any overhead automatically, select None.
The debit and credit account numbers to be used to post calculated burden and overhead are specified in Burden Rate Maintenance and Overhead Rate Maintenance. If Work-in-Process accounting is used, the Work-in-Process account specified in Job Type Maintenance for the Burden or Overhead cost type is used as the debit account.
The debit account should be the Work-in-Process account to be used for burden or overhead. The credit account should be an Allocated Burden or Allocated Overhead account.
You can specify the cost code and cost type to be used to post calculated overhead in the same manner as burden.
Burden can be calculated as a percentage of direct wages or on a cost-per-hour basis. The method of calculation and rate can be specified for each job type in Burden Rate Maintenance. You can also specify the burden rate in the Payroll system using Labor Code Maintenance.
The rate used should closely approximate the total amount of union contributions, workers' compensation insurance, employer taxes, and other costs associated with direct wages. If you use Labor Code Maintenance, a different labor code should be used for each class of worker or type of job performed that has different associated indirect costs.
Burden Rate Maintenance is also used to specify the cost code and cost type to be used to post the calculated burden amount. To post all burden calculated for a job to a single cost code/cost type, enter the appropriate cost code/cost type to use. In this case, it is recommended that you use the Burden cost type.
The debit and credit account numbers to be used to post calculated burden and overhead are specified in Burden Rate Maintenance and Overhead Rate Maintenance. If Work-in-Process accounting is used, the Work-in-Process account specified in Job Type Maintenance for the Burden or Overhead cost type is used as the debit account.
The debit account should be the Work-in-Process account to be used for burden or overhead. The credit account should be an Allocated Burden or Allocated Overhead account.
Note Burden Rate Maintenance is available only if the Payroll module is installed, and can calculate burden only for Payroll entries. Burden Rate Maintenance cannot calculate burden for job posting entries or Accounts Payable entries. To calculate burden without the Payroll module, in Overhead Rate Maintenance, select Labor in the Cost Type field and Burden in the Overhead Cost Type field.
To post burden amounts based on the phase number or other cost category, use the Mask feature to indicate the cost code to be used based on the cost code used for the direct labor.
To post calculated burden to the same phase number and subphase number as the cost code used for direct labor but with a step number of 990, enter ***-***-990 as the burden cost code and select Burden in the Burden Cost Type field. In this example, each phase and subphase has a separate burden account. For example, if the Labor cost code is 154-250-000, then the Burden cost code is 154-250-990.
To post calculated burden to the same cost code as the cost code used for direct labor, enter ***-***-*** as the burden cost code. If you select Labor instead of Burden in the Burden Cost Type field, the burden amount is posted to the same cost code or cost type as the direct labor.
For more information, see:
The standard retention rate can be specified. The retention rate can be used in Job Posting Entry, Job Billing Data Entry, and Account Receivable Invoice Data Entry to calculate automatically the amount to retain. A retention amount can be calculated and tracked for each invoice until the invoice is fully paid. The Accounts Receivable Aged Invoice Report, Trial Balance Report, and Cash Expectation Report list the retention balance, which is included in the invoice balance.
The Accounts Receivable retention amount can be calculated automatically in Job Posting Entry, Job Billing Data Entry, or Accounts Receivable Invoice Data Entry using the standard retention rate specified for each job. The calculated retention can be overridden manually during data entry. The retention amount is calculated by multiplying the total billable amount for the invoice by the retention rate.
For more information, see Job Masterfile Maintenance.
Postings
The general ledger postings for overhead allocations are made from the Daily Overhead Allocation Register or the Monthly Overhead Allocation Report based on the selection made in the Apply Overhead on a Daily or Monthly Basis field in Job Cost Options.
Regardless of whether overhead is applied on a daily or monthly basis, the calculated overhead amounts are credited to the same general ledger account specified in Overhead Rate Maintenance.
If Work-in-Process accounting is used, the appropriate Work-in-Process account specified for the Overhead cost type in Job Type Maintenance is debited instead of the debit account specified in Overhead Rate Maintenance.
For more information, see:
When a job is billed using the Job Billing process, the appropriate general ledger adjustments are made based on the accounting method specified for each job.
Warning The Job Billing process is the only process that performs work-in-process adjustments when recording job billings. Job Posting Entry and Accounts Receivable Invoice Data Entry do not make any work-in-process adjustments.
The revenue and associated cost-of-sale amounts are recognized at the time that a job is billed. In addition to posting sales amounts to the Revenue account, the Work-in-Process account is credited, and the Cost of Sale account is debited with the total billed cost for each job. The work-in-process posting for each cost code and cost type detailed for a job is based on the total billed cost as of the invoice billing date.
A General Ledger Work In Process Recap report prints following the Job Billing Register for any Percentage of Completion jobs that are billed.
The revenue and associated cost-of-sale amounts are not recognized until the job is closed. Any billing for the job is posted to the Deferred Revenue account instead of the standard Revenue account. Both revenue accounts are specified for each job type in Job Type Maintenance. No postings are made to Work-in-Process or Cost of Sale accounts at the time of billing.
The following example illustrates a typical general ledger posting for a $1000.00 invoice with 20 percent retention for a Time and Material job.
G/L Account
Debit
Credit
Net Invoice Amount
Accounts Receivable
800.00
Retention Amount
Retention Receivable
200.00
Taxable Billing
Job Revenue
500.00
Non-Taxable Billing
Job Revenue
470.00
6% Sales Tax
Sales Tax
______
30.00
1000.00
1000.00
If the job is using the Completed Contract method, and Work-in-Process accounting is used, the Deferred Revenue account is used instead of the Job Revenue account.
If the job is using the Percentage of Completion method, and Work-in-Process accounting is used, the following additional postings are performed.
G/L Account
Debit
Credit
Billed Cost - Labor
Cost of Sale - Labor
450.00
Billed Cost - Material
Cost of Sale - Material
250.00
Billed Cost - Labor
WIP - Labor
450.00
Billed Cost - Material
WIP - Material
______
250.00
700.00
700.00
For more information, see:
If the Work-in-Process accounting method is used, the Job Close-Out Register posts closing entries to the general ledger for any unbilled costs associated with jobs that are completed.
The Work-in-Process account is credited, and the Cost of Sale account is debited with the total unbilled cost for each job. For jobs using the Completed Contract method, the billed-to-date amount, if any, is debited to the Deferred Revenue account and credited to the standard Revenue account.
The following illustration shows a typical general ledger posting for a job using the Completed Contract method that was closed with the total unbilled cost of $4000.00 and billed-to-date amount of $5000.00.
G/L Account
Debit
Credit
Unbilled Cost - Labor
Cost of Sale - Labor
2500.00
Unbilled Cost - Material
Cost of Sale - Material
1500.00
Billed-to-Date
Deferred Revenue
5000.00
Unbilled Cost - Labor
WIP - Labor
2500.00
Unbilled Cost - Material
WIP - Material
1500.00
Billed-to-Date
Standard Revenue
_______
5000.00
9000.00
9000.00
The Job Cost module allows you to post transactions to a future accounting period. Unlike the General Ledger module, however, the future posting capability for Job Cost is limited to the accounting period following the current period specified in Job Cost Options.
As job transactions are posted, the accounting date is used to update the transactions and check them against the current Job Cost period defined in Job Cost Options. The transaction amounts posted in the future periods do not appear on the Job Masterfile Maintenance and Job Masterfile Inquiry Job Status tabs, and Cost Code Detail window for the Period to Date, Year to Date, and Job to Date fields. Instead, the Future feature must be used to display a window containing the future period activity and the year-to-date and job-to-date amounts reflecting future postings. The unbilled work in process always includes future period postings; therefore, when trying to balance the general ledger, you must include future general ledger postings when printing general ledger reports. The Transaction Journal report includes future postings.
The Work in Process Report (Cost Code Detail option) and Job Profitability Report provide job-to-date information up to and including the current Job Cost period. The Job Billing Recap Report provides period-to-date information up to and including the current Job Cost period. The Job Analysis Report and the Job Cost Code Detail Report provide job-to-date and period-to-date information up to and including the current Job Cost period. To obtain job information for the next accounting period on these reports, period-end processing must be completed for the current period.
For more information, see Job Cost Options.
Work-in-Process (WIP) Accounting
As a standard accounting practice, contractors and other businesses that bill customers based on the portions of jobs completed (progress billing) typically use the Work-in-Process accounting method. When the Work-in-Process accounting method is used, all expenses related to jobs still in progress are posted to a Work-in-Process asset account in the general ledger. When a job is completed or billed, the total unbilled cost for the job is relieved from the Work-in-Process account and posted to the Cost-of-Sale account.
To use the Work-in-Process accounting method, the Post to G/L for Work in Process check box must be selected in Job Cost Options. If the check box is cleared, no work-in-process postings are made.
The Work-in-Process general ledger accounts to be used are assigned in Job Type Maintenance for each job type. A separate account can be specified for each cost type (Labor, Material, etc.).
When cost transactions are posted to jobs, the appropriate Work-in-Process account, based on the job type and the transaction's cost type, is debited. This account can be overridden during data entry. If the Work-in-Process accounting method is not used, the default expense account specified for the cost code or cost type in Cost Code Maintenance is used.
If the Post to G/L for Work in Process check box is selected in Job Cost Options, and Percentage of Completion is selected at the Acctg Method field for the job in Job Masterfile Maintenance, WIP is relieved when the invoice is updated. Only the WIP amount posted before the invoice date is recognized in this case.
If the Post to G/L for Work in Process check box is selected in Job Cost Options, and Completed Contract is selected at the Acctg Method field for the job in Job Masterfile Maintenance, WIP is relieved when the job is closed. This occurs when the Job Close Out Register is printed and updated.
If the Post to G/L for Work in Process check box is cleared in Job Cost Options, all revenue and costs for the job are already recognized on income statements when the revenue and costs are incurred.
The general ledger accounts used for relieving WIP are determined in Post to G/L for Work in Process, accessed from Job Type Maintenance. When WIP is relieved, the Cost of Sale account for the cost type is debited and the Work in Process account for the cost type is credited.
Troubleshooting
Under certain circumstances, closed jobs will not be purged from the Job Cost module, even though the status is "Closed" and the Job Close Out Register was run and period-end processing completed. The following conditions may apply.
A job cannot be purged if it has an unbilled cost, deferred revenue, or retention.
Job Close Out will process and clear any unbilled cost; however, retention must be cleared by entering a retention invoice in the Job Cost module. For more information, see Enter Retention Invoices.
Closed jobs are saved to history files instead of purged during period-end processing if Retain Job Cost History was selected in Job Cost Options. Purge jobs from the history files using the Job Cost History Purge Utility.
