WORKING SMARTER EVERY
DAY
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Job
Cost Transfers
It's going
to happen sometime. You've got a cost on a job that
can't be billed. Or you've gone over estimate, a
vendor invoice was added to the wrong job or
something unexpected happened. What to do? Transfer
the job costs.
Job cost transfers allow billable costs from one
job or task to be charged to another. You can
move a cost from one job to a different job, or
from one client to another client.
Both the net and gross (billable) amount can be
transferred. Generally, only the gross
(billable) is moved. Here's why: You want to keep
an accurate total of what the job's production cost
is. If you transfer net cost, the job the cost is
transferred from becomes more profitable than it
really is because it's missing a net cost. The job
the net cost is transferred to is less profitable
as it now shows net cost it didn't incur.
What if a cost has the wrong job number? If
a net cost is mistakenly placed on the wrong job,
transfer both the net and gross cost to the correct
job. This procedure is easier than unposting,
editing and reposting the transaction
What
about unbilled time? If the cost to be
transferred is unbilled time on the wrong job,
simply edit the time entry. This moves the hours,
in addition to the net and gross amounts, to the
proper job. If unbilled time can't be billed from
its job, leave the hours and net cost but transfer
the gross (i.e., unbilled) amount only.
Whoa there, buddy. Be sure to limit
employees who have access to job cost transfer. It
is possible to use this method to make jobs look
more profitable then they really are. You do not
want someone to abuse this useful tool.
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By Karen Farnum
Let's face the
facts: You need to bill your clients for the work that you
do. But for every hundred agencies out there, there are a
hundred different ways to do billing. The key is to first
figure out your internal billing process, then see how
Clients & Profits fits into it. Here are some ideas to
help.
Someone first needs to
identify the jobs that are ready to bill. It's usually the
AE, but not always. The accounting department should
establish a routine billing cycle (e.g., 15th and 30th of
the month) so everyone knows when the billing cutoff time
is. Be sure to stick to it. While every client has a special
billing situation, these cause delays in billing -- which
means delays in payment.
Start by
printing the Billing Worksheet from Snapshots, since it
lists all jobs with currently unbilled costs. (Hint: Use a
"Ready To Bill" status code that lets AEs communicate easily
and efficiently with the accounting department so they know
which jobs to bill. Use this report as a billing checklist
(it can even identify the steps of your shop's billing
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workflow
on the report itself). Use it as a guide to review a job's
costs: Are the job cost Accounts Payable invoices added and
posted? Has all time been added? What about in-house
expenses? Have the A/P invoices and the expenses been
posted? And of course review any open POs and contact the
vendor to find out if you owe them additional money.
(Another
tip: Instead of printing cost reports on paper, train your
AEs to review job costs using Clients & Profits. All
costs can be reviewed online right from the Job Ticket
window. The trees you'll save thank you in advance.)
Once the
jobs have been reviewed, the invoice can be created in A/R.
There are many shortcuts that make adding invoices for
unbilled jobs fast and easy (the Better
Billing newsletter has details). Now the invoices you've
created can be printed for a final review, posted, then
mailed to awaiting clients.
Karen
Farnum is a member of the Clients & Profits
Helpdesk.
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