Often times job costs are allocated incorrectly. Usually to the wrong job. It is pretty time consuming to fix these errors. Since this is such a common occurrence, there should be a simple and easy way to correct this without having to void records. Especially since Job Costs don't affect GL accounts.
Example Scenario: Material is purchased for Phase 0 of a job, but then it is later used on Phase 1 of the job and needs to be reallocated. A payable invoice was created, and all job costs were allocated to Phase 0.
It would be ideal if you could just find the original record, go to the job cost window, and re-allocate without having to void any other records.
As it currently stands, the most efficient work arounds we have figured out are:
A) If the record is unpaid/not reconciled: Copy the original record, void, paste, and save with correct allocations. This method is also used for Inventory Allocations.
B) If the record is paid/reconciled: Copy the original record, paste, modify quantities to negative to make a credit invoice. Paste again, and this time enter correct allocations for job costs. Pay both invoices by printing a $0 invoice.
C) If the record is paid/reconciled and there are a small amount of job costs: go directly into job cost records, and copy/paste a negative job cost (to negate the original job cost), then paste the job cost again and correct the job/phase/work order.
None of these methods are overly efficient. If users could alter the job costs from the job cost table without having to void the record, it would save a lot of time. I think this should be achievable for the simple fact that job costs do not affect the GL. Since job costs are completely independent, it makes no sense that the GL side of the record has to also be altered in order to alter the job cost side of the record.
If this idea does get implemented, please also consider providing a "lock job cost" functionality, where once posted the job cost is locked, but admin staff can "unlock" the cost table and make corrections if needed. Similar to the "lock budget" function. This would allow companies who need the job costs to stay locked to have an option to control this. I can't speak for other companies, but our company WOULDN'T need this. I just thought it would preserve the function as it currently is, but would provide additional function for those who need the flexibility.
by: Ryan B. | over a year ago | Project Management
Comments
YES - we often have employees who are working on several projects and can get the Job # incorrect. (or they just get dyslexic!) Would be great to have an option in the 6-3 screen to transfer cost from one job to another job. This function would transfer to the correct job and either void or reverse the original job cost.
I agree with the above comments that this would only be for items in the 6-3 screen for job costs. If there is a transaction that would affect the GL, that would need to be done in the 1-3 screen by someone who has access to do so.
Having the program transfer the costs will provide a better audit trail and also be much more user friendly.
Ummm, Job Costs DOES AFFECT G/L accounts. All job costs are posted to the Direct Expense accounts.
Also you are failing to take into account that the jobs you are wanting to transfer may be in different departments.
It may not be 'efficient' but it is good Accounting practice in case you need to trace back where cost came from to create a negative entry and then a positive entry.
Hi Nick E., I think you are misunderstanding.
Firstly, I would like to note that the issue you brought up is already a problem. It is entirely possible to put a job number in the 4-2 screen, but then go to Costs > Job Costs, and entire any combination of jobs that you wish (regardless of what department the job is in). Departments are determined from the origin table of where the cost came from, not the job cost table. I know this, because there are not 'Account' or 'Subaccount' fields that exist in the 6-3 job costs table (and they do exist in the original table). For example, 4-2 Payable Invoices has 'Account' and 'Subaccount' columns. Those columns determine the department that each line item gets allocated to. Therefore, job costs are independent of GL accounts. The only relationships are the "source" and "transaction number" fields in the job costs table, and that when creating a job cost record from a source table, job costs must equal the same amount as the GL amount. This exists for the sole purpose of traceability between job costs and source tables.
Secondly, your concern is irrelevant to our company. The materials that our company purchases are department specific (for example, materials bought for department 1 will always be department 1 because they are not usable in any other department). If our company is like this, it's at least possible that several other companies may be designed this way as well.
Thirdly, my proposal will provide better traceability because whenever cost record reports are ran, they will maintain the ability to traced back to the source; new cost records would be automatically generated and the old ones automatically voided (which saves a lot of time); the new cost records would also contain the transaction number and source table, so when "drilled" into, it would take you back to the source. The difference between my proposal and how the system works now would be that only cost records are voided/created, whereas with current methods both the source record and job cost record must be voided/recreated. As it stands, if all we want to do is transfer the job costs (and everything GL is the same), and the invoice was paid and the bank rec completed (a common occurrence in our company), the most efficient method is method C) as I outlined in the original post. Method C) does not provide good traceability, which is problematic.
Lastly, I was aware that this proposal may not work for all companies (by the sounds of it, yours). This is why I also proposed that if this idea gets implemented that a "lock job cost" functionality be also implemented. For companies such as yours that are at risk of allocating to the wrong GL department, there needs to be a "lock job cost" field that is checked by default (think of how budgets function). This will force users to void and create a new record (like how the system currently works). My proposal would only provide extra functionality for those that need it, but keep control for those who need that instead.
**but then go to Costs > Job Costs, and *enter* any combination of jobs that you wish (regardless of what department the job is in).**
game changer for quickly reconciling at end of month/period/year