Is it possible to track profitability on a sale from cost that gets applied to a manufacturing or work order?
Jennifer replies:
Hello Greg,
Work orders do not post to the general ledger, which means that they do not affect any financial reports in QuickBooks.
Therefore, you cannot track profitability via a work order. You must convert it to an invoice before QuickBooks can compute profitability.
I hope this answers your question about profitability tracking. Take care and thanks for writing.
Comments for Profitability Tracking
Aug 04, 2012
Service Business
by: Diana
Just finished reading your article on Reimbursable Expenses How to Record in QB and I have been using Method 1 and 3 for various clients and am faced with a dilema. 50% of my clients are sent an invoice for our services and software products (custom software not COTS). 50% are invoiced for equipment with a mark-up, or subcontractor labor with a mark-up. For 95% of our clients, we used Method 1, for 5% of our clients we used method 3 – but ‘sort of’. We never used “Bills” from our subcontractors or vendors, and we never used the Dialogue box that pops up when creating an invoice for the client – the checks written for vendors sometimes used the expenses tab, and others used the items tab (when we needed to see profit/loss on a sub:job). Often the “Bill” from a vendor arrives AFTER we invoiced the client. Should the P&L show all income (hence the Expenses Tab) and expenses or just what we realize? Why and why not? Should we go back and redo all our entries? What are the consequences for the tax preparer Method 1 vs Method 3? Thanks in advance!
My name is Jennifer Johnson and I’ve worked in the accounting industry since 1992, mostly as a freelance bookkeeper and QuickBooks consultant for small, privately-held firms. I had clients across the country and was certified in QuickBooks from about 2004 to 2011. I wrote a number of ebooks about QuickBooks during that time. In 2011 I accepted a full-time staff position with my largest client, and sold my bookkeeping practice. I finished my undergraduate degree in accounting in 2016, and then my masters in accountancy in 2018. I now teach accounting at the University of Illinois Urbana-Champaign, one of the top accountancy programs in the United States, if not the world. AMDG
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