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What exactly is a job cost, anyway?

     It's simple. Everything the shop spends on a client's job is a job cost. This includes time (both billable and unbillable), vendor purchases (e.g., printing, etc.), out-of-pocket expenses (e.g., tolls, parking, tolls, etc.) and internal charges (e.g., color proofs). They're all important and all have to be accounted for on jobs and tasks.

     Time is the easiest to track, but it demands the most involvement and cooperation from the staff. Staff members can use the pop-up time card in Clients & Profits to track their hours while they work. Or, hours can be entered weekly from a paper time slip using Time Sheets. Staffers can even enter their hours from home, a hotel room, or a client's conference room using the My Clients & Profits! web server. With Clients & Profits, there's no reasonable excuse why time can't be tracked.

     Outside purchases are entered into Accounts Payable from invoices received from vendors. An invoice can be split between different jobs and tasks, so that each cost amount is charged to the right client job. Purchases should be entered daily, proofed, and then posted. A/P clerks tend to keep invoices together until there are enough to make them worth entering, but this slows down the job costing process. It's better to enter them every day after the mail arrives.

     In-house expenses and internal charges are any costs that are not time or vendor purchases. Expenses are out-of-pocket costs like parking, tolls, faxes, telephone calls, and other incidentals. Pricier expenses for such things as color proofs, zip disks, and CD-Rs can be job costed as internal charges. Internal charges can be set up in a table with a standard per-unit price, so that charges are priced based on the quantity used. In addition, checks can be written for job costs that are bought COD. These costs, called direct disbursements, can be allocated to any number of jobs and tasks.

Don't overlook purchase orders

     Purchase orders are your first line of defense for outside costs, so don't overlook them. POs help document exactly what's being purchased from a vendor, and have two purposes:

they track upcoming costs on jobs and tasks, and they ensure the vendor's invoice doesn't exceed what the agency ordered. They're a great tool for keeping tabs on vendors, whom you can't always trust.

     Plus, tracking POs allows AEs and the accounting department to see any outstanding orders that haven't been billed by vendors before the billings go out. These upcoming costs can then be billed on the same invoice as the current costs, eliminating missed billings.

The secret to excellent job costing

     The staff is your secret weapon for better job costing. Once your costing and billing process is defined and established, the shop's employees can enter the day-to-day time, costs, and expenses into Clients & Profits as a matter of habit.

     Clients & Profits helps in dozens of ways by automating most of the data entry, billing review, and invoicing process. For example, Clients & Profits forces users to enter only valid open jobs and tasks, so costs don't fall through the cracks. And budget alerts can be set to notify staff members when they're spending too much time or money on a job task. Both pre-billing and post-billing job and

     With Clients & Profits, you have "someone on the inside"-- G/L Tools! Tools like the Auditor that save you from having to print and analyze hundreds of pages of reports to find accounting problems. The Out of Balance Checker quickly finds any unbalanced journal entries. Your General Ledger was never this nice, or smart, before cost reports make it easy for AEs, account supervisors, production managers, and management to see where job costs happened. And since there's no double-entry, job costs update billing and financial accounting data in one step. Together, these features help make entering job costs quick, easy, and accurate.

Keeping tabs on job costs

     The most successful agencies that use Clients & Profits prosper because they know their costs and bill them quickly, regularly, and accurately. Without knowing all of your job costs, you'll never know if you're making the most of efforts of your staff's labors. But with accurate job costing, Clients & Profits offers dozens of ways to analyze the profitability of your jobs and clients. In the end, you'll get the numbers you need to know your true performance.