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Jobs with Phases: If you want to divide jobs into separate stages.

Jobs with Phases, Cost Types, and Cost Codes: If you want to assess

cost of each item, its type/group, and its time of usage in each stage
of the project.



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Lesson VIII”Job Costing
Setting Up a Job


Each job you set up in Peachtree Accounting can have up to three elements:
phases, cost codes, and cost types. For more information on these elements,
refer to the “Job Costing” chapter of the User™s Guide.
For this tutorial, we are going to set up a job which uses phases and cost codes.
Then we will enter a purchase and assign the transaction to a particular phase.
Next, we will enter a payroll transaction and assign labor and a cost code to a
second phase. Finally, we will invoice the customer for reimbursable expenses
and analyze job profitability.

Setting Up a Job
One of our sample company™s customers, Torrance Country Club, needs to
have some landscaping work done. We need to set up a job ID so that we can
track supplies and employee labor charged throughout the landscaping
project.
1 From the Maintain menu, select Job Costs, and then Jobs.




The Maintain Jobs window stores general information about the job and
custom field information you want to track. It also allows you to enter
estimated revenues and expenses in order to analyze job profitability.
We need to create a job for Torrance Country Club™s landscaping work.
Most of the job information entered on this window is standard for all
jobs, except for the job name and customer ID. Our sample company
already has a similar landscaping job. We can copy the information from
it to our new job to save data entry time.




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Getting Started Guide


In the Job ID field, type ? and select HENSLEY-01 (Hensley Park
2
Landscape).
This is a job still in progress. Notice the percentage of completion is
currently set at 40%. It is also set up to use phases, which will be
explained in a moment.
3 Select the Estimated Exp./Rev. tab.




The estimated expense and revenue is currently established for this job.
It is broken down by phase ID and cost code ID for phases that use cost
codes. Phase IDs and cost code IDs are set up in the Maintain Phases and
Maintain Cost Codes windows. Your jobs can use any or all of the phase
and cost codes currently set up for your company.
Let™s take a look at the phase codes currently set up for Bellwether
Garden Supply.
4 Click your mouse pointer in the first Phase ID field (01-Design) and select
the lookup button.
The lookup list displays all of the phases set up in the Maintain Phases
window. Our sample company uses phases to break down all possible
stages of landscaping.




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Lesson VIII”Job Costing
Setting Up a Job


5 Select the Edit button from the Phase ID lookup list.




This Design phase does not use a cost code, so a cost type is established
for the phase itself.
6 If you want to examine the current cost types, select the Cost Type drop-
down list.

7 Click the lookup button in the Phase ID field again, but this time select 03-
Nursery from the list.
Notice that this phase uses cost codes. The cost type is set up with the
cost code itself in the Maintain Costs window.
8 Select the Close button to return to the Estimated Expense and Revenue
tab.
Because the first two phases (01-Design and 02-Permits) do not use cost
codes, the Cost Code ID fields are disabled. However, our third phase,
03-Nursery, is set up to use cost codes.




9 Move to the Cost Code ID field for phase 03-Nursery (currently displaying
010-Labor). Click the lookup button to display the cost code lookup list.
Notice the cost code descriptions. These are set up in the Maintain Cost
Codes window and break down the areas of job cost for our sample
company.




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10 With 010 Labor selected, select Edit from the lookup list to examine this
cost code.
The Maintain Cost Codes window appears. Notice this cost code uses
the cost type of Labor.
11 Press q to return to the Estimated Exp./Rev. tab.

Job Estimates
You can create estimates for revenue and expenses of a job. These can be
broken down into phases and cost codes. These items help you calculate
the job™s profitability. Since these are just estimates, they are not
recorded to the General Ledger. You can optionally print the estimate
using the job reports.


Copying a Job ID
To save time we are going to copy this job information to our new job,
and then enter estimated revenue and expenses.
12 Double-click the Job ID field to highlight the text.

13 Type TORRANCE-01 and press e.
You may get a message indicating you have modified the current record
and asking if you want to save it. (This is an option you can activate in
Global Options.) Select No for right now and continue entering the new
job ID code.
Typing over the existing ID and pressing e automatically copies the
job information to the new ID, including cost codes and phase codes. It
does not copy beginning balances.


You can copy any ID in the Maintain windows using this method.
14 In the Description field, type Torrance Landscape and press e.
Note
The current estimated expenses and revenues apply to this job. Select the
General tab.
15 In the For Customer field, enter TORRANCE-01 to change the customer to
Torrance Country Club.

16 In the Start Date, enter 3/15/03.

17 Change the % Complete value to zero (˜).




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Lesson VIII”Job Costing
Setting Up a Job


18 Select the Custom Fields tab.
These field labels are established in the Job Defaults window. (From the
Maintain menu, select Default Information, and then Jobs.) You could
enter unique information that applies to this job. For tutorial purposes,
we will not change these fields.
19 Select the Estimated Exp./Rev. tab. Enter the estimates similar to the
following:




20 Select Save to establish the new job, and then close the Maintain Jobs
window.

Job Beginning Balances
If you are setting up your company, you may have jobs already in progress.
When you start to use Peachtree Accounting, you will need to enter beginning
balances for those jobs. You can break down revenue and expenses by phase
code and cost code. All of this information is valuable in establishing accurate
up-to-date balances in the job ledger. None of the information entered in the
Job Beginning Balances window is recorded to the General Ledger.
Since this is a new job, we can skip this. For more information on job
beginning balances, refer to the “Job Costing” chapter in the User™s Guide.
Now we™re ready to apply some transactions to this job.




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Job Costing and Purchasing
Before we can begin work on Torrance Country Club, we will purchase a
building permit from the county licensing board.

Purchasing Inventory Items for Jobs
An important point here is that you cannot purchase stock items or
assemblies and apply them against a job. You can, however, apply non-stock,
labor, or service items to a job. You can also record the purchase without
using inventory; you would just include a description of the item.
If you need to apply a purchased stock item to a job, you can include it in the
service you provide through Sales/Invoicing. Another way is to use the
Inventory Adjustments window to decrease your inventory, and apply the
adjustment to the job.
The cost of the permit can be charged to the job in one of three ways:
Record the purchase directly as a job expense using inventory. You

can assign a non-stock or a description-only inventory item to a job
when you purchase it, but not a stock or assembly item.
Record the purchase directly as a job expense without using

inventory. You just record the expense by skipping the Item ID field
and including a description of the expense. This method is best when
recording time and expense transactions that you purchase on behalf
of customer jobs.
Record the purchase into Inventory, without entering a Job. When

you bill the customer, enter the item and the job. Peachtree
Accounting posts the price as job revenue and the Cost of Goods
Sold as job expense.
1 From the Tasks menu, select Purchases/Receive Inventory. Peachtree displays
the Purchases/Receive Inventory window.

Type GWINLICENSE-01 for the Vendor and press e.
2

3 Type 888 for the Invoice #.

4 Select the Apply to Purchases tab, if it is not already selected, and move to
the first transaction line.

5 Skip the Quantity and Item ID fields to move to the Description field. Type
License for Torrance Landscape. Then, press e.

6 Accept account number 69˜˜˜ for the Licenses Expense G/L account and
move to the Amount field.




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Lesson VIII”Job Costing
Job Cost and Payroll


The total purchase cost of the permit is $75.00. Type 75.00 and press e
7
to move to the Job field.

Type ? to display the Job lookup list.
8




Jobs with a folder indicate that phase codes and or cost codes are used.
Jobs with just a “J” do not use phases or cost codes.
9 Double-click the TORRANCE-01 job folder to open it up and display the list
of phases that you can apply to the job.
Phases with folders indicate that the job phase contains cost codes.

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