FACCTS Accounting System - Application Notes

Jobcost Procedures

Jobcosting procedures consist of the two major areas of data entry and report running/analysis. Data entry takes place both in the jobcost subsystem and in the other major accounting subsystems.

Before any of the other parts of the jobcost facility can be used, it is necessary to set up at least one job, one expense/revenue category, and one department. Normally, all of the departments and most of the expense/revenue categories can be set up when the system is installed. As expense and revenue entries occur, it may be necessary to set up new categories to accomodate them.

Each job requires, at a minimum, a job number, a job description, and a responsible department. For most jobs, you will also want to enter start date and budget figures. Each job can be set up as the job begins; naturally, no charge can be made to a job until it is set up in the jobcost subsystem.

If jobcosting is in use in your system, each time an invoice is entered into A/R or A/P and each time a manual entry is made to G/L, you will be asked if you wish to jobcost the entry. If you do, you will be prompted to enter the appropriate information for each jobcost item. Each invoice or manual entry may have several jobcost details and these do not necessarily correspond to the detail line items of the invoice or manual entry. Each jobcost detail will require the entry of a job number, department, expense/revenue category, and a dollar amount. All dollar amounts are assumed to be positive in the normal case, with the type of the category (expense or revenue) determining the proper sign of the entry. Thus, revenue booked from A/R and expense booked from A/P are both normally positive numbers. A credit (reversal) from either source would be negative, as would entries to expense categories from A/R or revenue categories from A/P.

Note that there is no requirement that an entire invoice or manual entry be jobcosted. As an example, parts of a telephone bill might apply to specific jobs and the rest be general office overhead that is not tracked with jobcosting. In this case, only the amounts that apply to the jobs need be entered in the jobcost entry section of the A/P invoice screens.

As with the ledger accounts to be used for distribution of revenue or expense, we suggest that the paper invoices used for booking the information to FACCTS be hand coded with the jobcost information before entry is begun. In particular, payables invoices must normally be approved before entry into the system, so this is a good time to make sure that the correct ledger and jobcost information is written on the invoice.

We suggest that at the end of each accounting period (typically a month), that jobcost reports be run and distributed to the department heads and project managers for verification. In a large company, the Jobcost by Job Report would be sent to each project manager and the Jobcost by Department would be sent to each department head. For smaller companies, one or the other of these reports will normally suffice for everyone. If accounting personnel also wish to verify the correctness of jobcost entry, we suggest use of the Jobcost by Category Report for this purpose.

Unlike the other subsystems, jobcosting has no natural accounting period. Analysis of job performance is normally required on demand; this might occur when a customer requires a progress report on a TM or cost plus job. Aside from the verification of data input described above, there is no periodic procedure required.

It is important, however, to make sure that jobs are flagged as completed as soon as possible after actual completion, and to close jobs relatively soon after completion. This avoids incorrectly charging to a job that is no longer active.