Data Entry

Data Entry

Key QBooks Data Entry Processes

1. Sharing Data between Red House & QB

2. Job Costing & Labor Burden

3. % of Completion Adjustment

4. Reconciling your accounts

(we will spend majority of our time on Job Costing and POC)

1. Sharing Data - Red House & QB Export Red House client list to Qbooks

prior to entering bills or payroll RH sends Customer/Job list to QB

Only Customer Name, Customer #, Job # QB attaches job costs to the imported

RH client list QB exports only job costs back to RH Import Job cost in Red House prior to

doing profitability analysis

Client List Integration

File Export / Import

Only the Customer Name, ID, Job Number are exported to QuickBooks

Export Client List from Red HouseSelect Export from the Tools Menu in Red House

Save file to your computer

Import Client List into QuickBooks

* Detailed Instructions in Handouts

Job Cost IntegrationRed House Job Gross Profit Report

QuickBooks

QuickBooks only exports Job Costs (COGS) to Red House. All overhead expense data is maintained in QuickBooks

How to Export Job Cost data to Red House

Run Memorized Report in QuickBooks

Save report to excel from QuickBooks. Date range of report will determine which costs are imported to Red House

How to Import Job Costs into Red House

Select Import from the Tools Menu

Attach excel file you previously saved from QuickBooks and click Upload


2. Job Costing Key Concepts Why Job Cost?

Evaluate profitability of each job Improve EstimatingCalculate Sales commissionCalculate HRS Bonuses

How to Job CostLink payroll, material, subcontractors to

related jobs Include Labor Burden

Quickbooks Job Cost Process

QuickBooks Job Cost Process

Record Collections in QuickBooks

Select Customer/Job

Enter Check Amounts* Detailed Instructions in Handouts

Record Job Costs

Enter Vendor

All COGS must have an ITEM & Customer:Job to integrate with Red House


Record Job Costs – Payroll

All time coded to a job must also be coded to a ‘Service Item’.

The ‘Payroll Item’ is used to determine the type of labor (direct, indirect, overtime, etc.)

HRS pay is based on the # of hours on the timesheet * employee pay rate.

Payroll – Service Items

Payroll Items

Systems Integration with Job CostsExport Job Costs to Red House

Review Job Profitability Reports (to be reviewed later in training)

Job Cost Process – Any Questions?

Main Points from Job Costing

G&A is only tracked in QuickBooks (not integrated with Red House)

Client Name and Job Number is entered once in Red House and exported to Qbooks

Job Costs are entered in Qbooks and exported to Red House for analysis

Collections are recorded in both Red House and QuickBooks

Labor Burden Considerations Costs directly related to the employment of an

HRS are included in labor burden Payroll Taxes Heath / Workers Compensation Insurance Vacation and other benefits Training and other non-billable time

Using a labor burden we can reflect these other costs of an HRS and apply them as job costs

Qbooks allocates overhead charges of an HRS’s employment to COGS – Labor Burden, and reduces Overhead by an equivalent amount

Calculating Labor BurdenHRS Base Yearly Wages: 126,880.00$ HRS Table (without overtime)

Wage Name Rate/HrType of Burden % Limit Rate Dollars Jerry 20.00

Richard 19.00 FICA/Medicare 7.65% 9,706.32$ Frank 22.00

FUTA 0.80% 7,000.00 168.00$

SUTA 2.55% 28,500.00 2,180.25$

Workers Comp 13.00% 13.00$ 16,494.40$ per 100.00$

General Liability 2.50% 25.00$ 3,172.00$ per 1,000.00$

Health Insurance 2,400.00$ 7,200.00$ per HRS

Vacation/Holiday 120 7,320.00$ hours per HRS

401k Administration -$

401k Employer Contribution 1.5% -$

Training/Office Down Time/Other Unbilled 1.5 4,758.00$ hours per HRS per wk Total 61.00

Retroactive Risk -$ (Factor to avoid retroactive changes in rates)

Total Labor Burden 50,998.97$

Labor Burden Rate 40.19%

List HRS Hourly Rate

Amount of Expenses directly related to the HRS employment

* Labor Burden Worksheet available on Red House Library

Set Up of Labor Burden in QBooks Only HRS employees are set up with a

labor burden

Make sure Labor Burden is included here

Detailed Accounting of Labor Burden

•Each Direct Labor has corresponding Labor Burden charge

99.75 Direct Labor

x 40% (Labor Burden %)

39.90 Labor Burden

P&L– Labor Burden

Labor Burden

Labor Burden / Direct Labor = 40.8%

Labor Burden is adjusted out of G&A costs

Job Costing Summary Accurate Job Costing takes effort

HRS timesheets must be maintained accurately

Vendor invoices need to be coded timelyCredit Card charges must be reconciled to

jobsJob profitability must be reviewedLabor burden applied

Learn the Qbooks job costing process Use the data to improve your business

3. % of Completion (POC)

POC adjustmentIncome Received reflects cash collections (this is the account we used to code cash deposits)

Why Adjust for POC

Cash collected prior to starting work and purchasing materials is not income, it is a liability to do work for a client. A month end adjustment is necessary to record customer payments as deposits when the payment are in excess of the % of work completed.

The % of completion adjustment is required to have meaningful monthly financial statements.

POC Simple Example 1/1/04 – $10,000 job sold ($3,333 collected) 1/30/04 – Job started ($3,333 collected) 2/15/04 – Job Complete (final $3,333) Total Job costs $5,000

Financial Impact January Bank Activity $6,666 (3,333+3,333) Feb Bank Activity -$1,667 (3,334-5,000)

Advance Payments are not Income, they are liabilities to do work.

Red House POC Report

This report should be used to identify adjustments to monthly revenue

% of completion = the ratio of actual cost / estimated costs.

Revenue = sales price * % of completion Revenue is then compared to the cash collected If revenue is less than the cash collected the

report displays a negative adjustment to revenue and vise versa.

All jobs must have an outstanding balance to be included on this report

Percent of Completion Report

Gallina Job Over Budget -500

Revised Total -9,224

Making the POC Entry 1) Print the % Completion report from RedHouse 2) Determine if you have over or under recorded revenue

Positive balances mean you have earned money not yet collected Negative balances mean you have collected money that has not

been earned

3) Make end of month adjusting journal entry (see screen shots for example) Date entry the last day of the month Use the following accounts

• 1300 · Costs in Excess of Billings – asset account reflects work completed but not collected

• 2480 · Billings in Excess of Costs – liability account reflects cash collections on work which has not been completed

• 3200 · % of Complete Earnings – Revenue Account

Making the POCMake Journal Entry

If Report Over/Under Total is Negative then

The entry is reduce Revenue (debit)

Increase Liability for uncompleted work (credit)

Debit Credit

3200 · % of Complete Earnings $ ###

2480 · Billings in Excess of Costs $ ###

If Report Over/Under Total is Positive then

The entry is Increase Revenue (credit)

Increase Assets for unpaid completed work (debit)

Debit Credit


1300 · Costs in Excess of Billings $ ###

% Completion Report Analysis

Making the POC Entry 4) Make reversing entry

Reversing entry removes the prior month accrual. Make the reversing journal entry dated the 1st of the next month noting that the account entered previously as a debit now becomes a credit and credits become debits.

If Report Over/Under Total is Negative then

Reversing Entry is made with the same amounts used at the end of last month

Debit Credit


2480 · Billings in Excess of Costs $ ###

If Report Over/Under Total is Positive then

Reversing Entry is made with the same amounts used at the end of last month

Debit Credit


1300 · Costs in Excess of Billings $ ###

Reversing Entry dated day 1 of next month

POC Considerations

The Red House report Percent of Completion is only a guide to make your adjustment.

The report is only as good as your original estimates. If jobs are running over budget or there is a high risk that

they will not be completed within budget you need to manually adjust the calculations and totals on the report.

Be very careful making adjustments that increase your current month’s revenue (be conservative in your evaluation of job status.)

4. Reconcile your Accounts Basic Bookkeeping (on your own)

Bank Statements (have all your outflows/inflows been recorded)

Credit Card Statements (have all your expenses been recorded)

Vendor Statements

Red House Integration (Case to help out) Cash Collections in Red House vs Deposits

recorded in QuickBooks Job Cost in QuickBooks vs Job Cost in Red House

Make sure Qbooks is Complete

Bank Reconciliations Have there been deposits made but not recorded Payments sent but not recorded Bank Fees / Processing Charges entered Accurate Cash Balance maintained

Vendor & Credit Card Statements Verify that all charges have been recorded Liability balances should be accurate Waiting to record charges when paid can create

misleading financial statements

Collections Reconciliation

Collections are entered in both Red House and QuickBooks

Collections in Red House allow us to maintain accurate Accounts Receivable balances

Collections in QuickBooks are required to accurately manage our cash balances

Monthly collections in Red House can be viewed in the Collections Report (Sales Section)

Qbooks / Red House Reconciliation

Amounts should agree. If they don’t you need to run the detail of each total and determine what is causing the difference.

Job Cost Reconciliation All Job Costs are entered in Qbooks Only Job Costs should be identical in both Red House

and QuickBooks Conditions that would prevent job costs from

being equal COGS attached to non- Red House Job Numbers COGS entered as Expenses, not Items in Qbooks Edits to Qbooks data never reimported back to Red

House Job Costs Deleted from Red House but never

reimported

Job Cost ReconciliationRed House Job Gross Profit Report

QuickBooksJob Profitability Summary

Keeping Accurate Data

Are Job Costing procedures implemented Reconcile Bank Statements, Credit Cards,

Vendor Statements, Loans Regular evaluation of Actuals Budget vs Actual Analysis

Documents

Data Entry