Job Cost Accounting Methods

Show/Hide All

The Job Cost system supports two types of accounting methods, which are used to determine the proper general ledger postings to be made for a job during the Job Billing and Job Close-Out processes.

The two accounting methods can be specified by job type in Job Type Maintenance or by individual jobs in Job Maintenance by selecting Percentage of Completion or Completed Contract in the Acctg Method field.

Warning The accounting method used is significant only if the Post to G/L for Work in Process check box is selected in the Job Cost Options window. If the check box is cleared, the Percentage of Completion accounting method is used, regardless of what method is selected.

Percentage of Completion Method

The Percentage of Completion method recognizes the revenue and associated cost of sale amounts at the time the job is billed. This method allows you to include in your financial reports the profit and loss associated with jobs that have been partially billed but not yet completed.

If the Post to G/L for Work in Process check box is selected in the Job Cost Options window, during the Job Billing process, the appropriate Work-in-Process general ledger account is credited and the Cost of Sale account is debited with the total cost-to-date amount associated with jobs that have been billed.

When a job using the Percentage of Completion method is closed and there is unbilled WIP for the job, the Job Close-Out process credits the appropriate Work-in-Process account and debits the Cost of Sale account with any unbilled costs.

Completed Contract Method

The Completed Contract method does not recognize the revenue and associated cost-of-sale amounts until the job is completed. Any billings made against the job are posted against the Deferred Revenue account instead of the standard Revenue account, and no postings are made to Work-in-Process or Cost of Sale accounts at the time of billing. This method can be used only if the Post to G/L for Work in Process check box is selected in the Job Cost Options window.

Miscellaneous charges entered in Job Billing Data Entry post to the selected expense account entered rather than the Deferred Revenue account.

When a job using the Completed Contract method is closed, the Job Close-Out process credits the appropriate Work-in-Process account and debits the Cost of Sale account with the total job-to-date costs. The Deferred Revenue account is debited with all previous billings, and the standard Revenue account is credited.

For more information, see:

Job Type Maintenance

Job Maintenance

Account Maintenance