This is the second part of a two-part series on Items and Jobs in QuickBooks Desktop. For Part 1, which explains how to create Item and Job records, see our article here. In Part 2, we'll discuss what you can do with your Items and Jobs now that you've created them.
Last month, we discussed how to create Item and Job records in QuickBooks. If you need a refresh on what a Job is, think of it as a project your company is completing for a customer, like a marketing campaign or a series of landscaping tasks. Once you set one up, you can assign all related transactions to it and eventually gauge its profitability.
We've already reviewed the steps required to manage Item and Job information in Part 1. These actions allow you to:
Create Product and Service Records (Lists | Item List | Item | New) that make up each Job.
Create the Jobs themselves (Customers | Customer Center | New Customer & Job | New Customer or Add Job).
This month, we’re going to explain how you can use Jobs in QuickBooks to keep track of all the income and expenses associated with your individual projects. You can assign expenses like products you purchase, billable time, mileage, overhead (we can provide additional information on how to calculate this), freight charges, postage, etc., to specific Jobs. And of course, you’ll want to assign payments received to Jobs.
Creating Billable Time Entries
If you are using QuickBooks Payroll and are going to be tracking hours for employees so that they can be paid for their time, ensure the worker is set up for this in QuickBooks first. Navigate to Employees | Employee Center and double-click the name of the employee. Click Payroll Info and check the box in front of Use time data to create paychecks, then click OK to close the window.
When you want to enter hours worked on a specific Job, open the Employees menu again. Click Enter Time | Time| Enter Single Activity. Complete the fields in this window as pictured below.
You can create a record of billable time that will be used to both pay the employee and invoice the customer in this window.
If you don’t see the Enter Time option in the Employees menu, you haven’t turned on time-tracking in QuickBooks. To do this, head to Edit | Preferences | Time & Expenses and click Company Preferences (And if you want to move time and expense entries into customer invoices from one center, check the box in front of Create invoices from a list of time and expenses). When you’re done, click OK. Click the Yes button under Do you track time? There are other options in this window. You can mark all time entries as billable by checking the box at the top right and even set a Default Markup Percentage. Ticking the billable box will allow you to create an invoice to your customer for the hours worked. Let's say, however, that your customer is paying a flat fee for the project, but you still want to track time for internal job-costing purposes. In this case, you can still use this window to record time against a project, you'll just need to ensure the "billable" checkbox is left unchecked.
QuickBooks Time Tip: Does your company have employees who work remotely, or out in the field? QuickBooks Time offers many benefits, like allowing employees the option to clock in from a mobile device, and saves the average company 11 hours managing worker time. Talk to us to learn more, or click here.
Assigning Jobs to Other Transactions
Any transaction in QuickBooks that can be assigned to a customer can also be assigned to a job. In all cases, be sure to assign the Job itself, not just the customer. And where appropriate, there will always be a Billable column or checkbox. Here are some examples of the transactions you can use:
Checks. This one’s easy. When you write a check, simply assign it to a CUSTOMER:JOB, whether it’s for Expenses or Items.
Sales Receipts. Say you’re doing a one-off task like tree and shrub trimming (as part of a larger Job) and the customer wants to pay you on the spot. In this case, you’d create a Sales Receipt. Go to Customers | Enter Sales Receipts. Select the CUSTOMER:JOB and fill out the rest of the fields, then save the transaction.
Bills. If you’ve ordered items to use for a specific Job and enter/pay the bill in QuickBooks, be sure to attribute it to the CUSTOMER:JOB.
Credit Card Charges. If you put an expense for a Job on a credit card, be sure to select the CUSTOMER:JOB when you enter it in QuickBooks.
Invoices. It's likely that you’re going to invoice customers for multiple transactions that you’ve assigned to a Job – that’s the reason you’re setting it up as a Job in the first place. There are at least three ways to do this.
Enter your billable items as individual entries as you go along. When you’re ready to bill the customer, open an invoice form and select the CUSTOMER | JOB. This window will open:
When you create an invoice for a customer who has outstanding billable time and expenses, QuickBooks will display this window.
Open the Customers menu and click Invoice for Time & Expenses. QuickBooks will display a list of Time,Expenses, Mileage, and Items. You select the date range and template type, and the software will create an invoice for the transactions you check.
Use Progress Invoicing. Enter products and services on an estimate, and you’ll be able to invoice them in batches. We can also show you how to do this.
Of course, you’ll eventually want to know how profitable all your Jobs are so you can adjust as needed. QuickBooks can help you determine this, and we’d be happy to show you how to access this data. Reach out schedule a session to talk about this or any other element of QuickBooks!