Wednesday, October 27, 2010

QuickBooks: Using Customer And Jobs

A client asked: We would like to account for every entry with either a customer or job entry. Is this possible.

You can use customer or job names in QuickBooks to segment your financial statements and to filter many of your QuickBooks summary reports and detail reports for specific customers or jobs. However, certain entries may not apply to specific customers/jobs or you may need to allocate the entry across multiple customers/jobs.

For example, you may need to allocate expenses for tools and equipment that you use over all of the jobs for any given year to multiple jobs. You may also incur expenses like utilities and other administrative expenses that you will never apply to a job.

So, depending on the transaction you can:

* Create a customer called "Overhead" and post the entry to that customer. If you prefer you can use a journal entry to allocate the overhead to the specific
customers/jobs.

* Split the detail of the transaction so that the single transaction (e.g. check, bill or invoice) applies to multiple customers/jobs.

Whatever method you use, this willalways use a customer or job on each and every transaction. If you do not include a customer or job, you will:

* Create a discrepancy between the Profit & Loss by Job and the Profit & Loss. Transactions that do not include a Customer/Job name simply do not show on the Profit & Loss by Job report. If you use a Customer called "Overhead," you will show the same totals on both the Profit & Loss and the Profit & Loss by Job.

* Receive a warning message that the transaction does not include a
Customer/Job name. (This warning is available in the Contractor Edition only.) If you exclude the customer/job name on selected posts only (e.g. posts that are overhead or posts to Balance Sheet accounts), the benefit of this warning is
diluted. Over time, users will become desensitized to the message.

For this reason it is best to use the Overhead Customer name on posts to Balance Sheet accounts even though QuickBooks does not allow you to filter the Balance Sheet by Customer/Job.