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How to Setup Customer Job Costing in QuickBooks?

Setup Customer Job Costing in QuickBooks

The term “job costing” refers to tracking income and expenses by job and comparing the actual amount to the estimated amount. Regardless of the software you use, it is absolutely essential for any contractor to be successful. Typically, contractors select a specific job costing program that is capable of handling billing, payroll and reporting. Although some contractors are unable to use this sophisticated software. Then it is advised to use Xero or QuickBooks. QuickBooks is still appropriate for small contractors who want to track expenses and income as well as easily pull some project reports, even though there are many complaints that it cannot perform job costing.

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How could you perform job costings using QuickBooks Online?

This blog introduces you to three ways to use QuickBooks Online Plus’s job costing feature. Even if you don’t have that edition, it will still work.

Let’s set up the job-costing cost codes in QuickBooks Online before going over some methods for performing job costing in the software:

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A standard, fundamental job cost structure for contractors might consist of:

  • Work or undertakings
  • Cost codes for project-related activities
  • Cost categories or cost types that correspond to expense categories on income statements.

QuickBooks users could use items (in QuickBooks desktop or QuickBooks Online) or products and services (in QuickBooks Online) to represent cost codes because the software was not designed for job costing. You can use these on both invoices and bills, for example, as they are present on both the expense and sale sides. As a result, you could create profit and loss reports for each item across the board for your entire business.

Adding Products and Services in QuickBooks Online

  • Select Lists > Products and Services by clicking the Gear icon. You can also access the Products and Services list by selecting the Products and Services tab under Sales in the left sidebar.
  • In the top right corner, click the [New] button.
  • Choose an item type from “Non-Inventory,” “Service,” “Inventory,” or “Bundle.”
  • Enter the pertinent item data, then select a category to record the item’s revenue.
  • Check the box that says “I purchase this product/service from a vendor” to be able to monitor costs for this item.
  • To save and close, click.

How to add sub-customers in QuickBooks? 

  • On the left sidebar, select “Sales” to add a new sub-customer.
  • Navigate to the Customer Tab.
  • Select New Customer from the menu in the top right.
  • Enter the name of the desired project in the Company and Display name as a field. This name should not be confused with the customer’s name to prevent confusion. Use the project number as an illustration.
  • Additionally, you must enter all data for deep tracking.
  • Mark the box. is a sub-customer, and you should select the customer’s name from the box below.
  • When entering an expense under a sub-customer, choose “Bill with parent” to associate the invoice with the client.
  • Select Save.

Overview of Customer Centre in QuickBooks

Learn how to quickly review the open tasks for and contact details for your client.

The Clients tab in QuickBooks Online Accountant enables you to view your client’s information and tasks quickly. You can quickly see information like payroll due dates and banking activity. You can also see how year-end tasks like tax preparation are progressing:

  • Examine the client’s details and open tasks
  • Open QuickBooks Online Accountant and log in
  • Select Clients from the menu
  • Choose the Bookkeeping or Overview tab

A great customer management tool is the QuickBooks Customer Centre.  It’s an extra benefit if it’s integrated into your bookkeeping program. Since QuickBooks links customer data with other documents like estimates, invoices, and sales receipts.

The QuickBooks Customer Centre’s plethora of features are designed to make managing your customer information easier, which is one of their main tenets. For instance, if you need them, you can keep a record of your customers’ default email addresses and cc emails. The email addresses are subsequently pre-populated on any forms that can be emailed from within QuickBooks. For every form type that is sent, default texts can also be created.

Adding a New Customer:

By selecting Customer Centre from the Customers menu, you can access the QuickBooks Customer Centre. The customer centre can also be added to the icon bar. (See QuickBooks’ Navigation.) 

You will see your customer: Job list on the left pane and the customer information pane on the right once the Customer Centre is opened. Information about your clients can be quickly viewed in the top portion of the right pane. For each, a view of transactions is displayed at the bottom that can be customized and filtered to meet your needs.

You’ll see a button labelled “New Customer & Job” at the top of the QuickBooks Customer Centre. This will reveal the window labelled “New Customer.” In the first box, titled “Customer Name,” type their name. Make sure to put their last name first if you want your list to be sorted by last name.

Once a customer is in your list, you can add jobs to their name by selecting “Add Job” with your right mouse button or by selecting “New Customer & Job” from the button above the list.

The following field asks for their initial balance. If you are entering data for an existing client who has a balance, you should enter that sum and select the appropriate date.

You will then navigate to the tab that is initially open by default, “Address Info,” after this. Here, you can set up “Bill To” and “Ship To” addresses and enter as much contact information as you like.

How to Create New Customers in QuickBooks

Find out how to add, edit, delete, or merge customers in QuickBooks Online.

It’s crucial to maintain organization and keep track of your clients as your company expands. You can add customer profiles to QuickBooks Online so you can include them on transactions or invoices. Here’s how to add customers and update your client list.

Add a new customer:

To track their subsequent transactions in QuickBooks Online, add your clients to the customer list.

How to do it is as follows:

  • Navigate to Get Paid & Pay or Sales, then Customers.
  • Choose New customer.
  • Enter the name you want to appear for the customer in the Customer display name field. (This field must be filled in.)
  • Review each section after that, and then add any additional crucial customer information.
  • Select the checkbox next to This customer is tax exempt in the Additional info section if the customer is tax exempt. Then, choose the reason for their tax exempt status from the Reason for exemption dropdown.
  • Click Save.

Add a sub-customer:

Under your top-level customers, you have the option to create sub-customers. This is helpful if you want to track specific clients who are also a part of a big group or company. While parent accounts can only have sub-customers up to four levels deep, you are permitted an unlimited number of sub-customers.

Add the parent customer first, if you haven’t done so already. Next, add each sub-customer as follows:

  • Click on Sales or Get Paid & Pay to navigate to Customers (Take me there).
  • Choose a new customer.
  • the name and contact information of the sub-customer.
  • Is a sub-customer is selected as a checkbox. A parent customer dropdown menu will appear after you take this action.
  • Select the parent account from the Parent customer drop-down menu.
  • If you want to bill both the parent and the sub-customer, check the Bill parent box. If you want the sub-customer to pay their own bills, uncheck this box.
  • Examine each section, then fill in any information you need for the sub-customer.
  • Select the checkbox next to This customer is tax exempt in the Additional info section if the sub-customer is tax exempt. Then choose the reason the customer is tax exempt from the Reason for exemption dropdown menu.
  • Click Save.

Note: To convert a sub-customer into a top-level customer in the future, just edit the sub-customer’s profile and deselect the Is a sub-customer checkbox.

Edit a customer:

Changes you make to customer information will also be reflected in other parts of your company file, such as previously sent invoices. Additionally, QuickBooks Online updates any recurring templates that make use of earlier data like billing, shipping, and email addresses, taxable status, and the preferred payment method and terms.

Here’s how to change a customer’s information:

  • Navigate to Get Paid & Pay or Sales, then Customers.
  • Choose the customer whose information you want to update.
  • Select Edit.
  • Make any necessary adjustments.
  • Select Save.

Delete a customer:

You can mark a customer as inactive to get rid of them, which will make them disappear from lists and menus. All a customer’s transactions will still be accessible on reports even if they are inactive.

Note: Sub-customers are also deleted when a parent customer is deleted. The customer, however, cannot be made inactive if there is a project associated with them. Delete any projects that are linked to the customer in order to make them inactive.

  • Go to Sales or Get paid & pay before Customers (Take me there).
  • To view the customer’s profile, click on their name.
  • Pick Edit from the dropdown menu.
  • Choose Make inactive. Select Yes, make inactive to confirm.

How to Create New Jobs for Customers in QuickBooks

Create top-level jobs: 

  • Click Jobs, then choose Add Job.
  • The job’s name and, if desired, a short code should be entered.
  • To add the next job immediately, choose Save or press Enter on your keyboard.
  • To stop adding jobs, click the X or Cancel button in the Add Job panel.

Create sub-level jobs:

  • Go to Jobs.
  • Choose the sub-level job you want to add under the top-level job to the right of it.
  • Type in the name of the sub-level job and, if desired, a short code.
  • To quickly add the next job, select Save or press Enter on your keyboard.
  • To stop adding jobs, click Cancel or the X in the Add Job panel.

Change a job’s level:

You have the option of changing jobs to a higher or lower level. Keep in mind that when you move a parent job, all of its children and team member assignments move along with it.

  • Go to Jobs, then select.
  • Choose More, then move.
  • In the window labelled “Choose a new parent job,”
  • Choose Top Level to increase the level.
  • Select any other job to lower the level.

Assign or unassign a job to the team members:

An individual or group is given the chance to monitor their time against the desired job when a job is assigned to them. A team member won’t be able to see a task on their time card if they are not assigned to it.

  • Go to Jobs.
  • make a choice.
  • Whether to assign or not to assign:
  • Choose Assign to all team members or edit to pick which team members to assign. Then go back and save.
  • Uncheck the box next to Assign to all team members to cancel the assignment, or choose Edit to deselect every box. Then go back and save.

How to Create Sub Job of Existing Jobs in QuickBooks

In QuickBooks Desktop Pro, you can create a job to keep track of the earnings and costs associated with client projects. Using the “Customers & Jobs” list, you can create a job in QuickBooks Desktop Pro for a customer. Open the “Customer Centre” window in QuickBooks Desktop Pro to create a job. Then, from the list of “Customers & Jobs,” choose the name of the customer for whom you want to create a job. Then select the “New Customer & Job” button located in the Customer Centre’s upper left corner. To open the “New Job” window, select the “Add Job” command from the drop-down.

The only difference between this window and the “New Customer” window is that the “New Job” window’s first three tabs have the data for the selected customer already filled in. In the “Job Name” field at the top of the window, merely type the job’s name. After that, enter the specific job information by clicking the “Job Info” tab.

In this section, you can add a longer job description in the “Job Description” field. Next, specify the job type in the “Job Type” field or select an earlier entry from the drop-down menu. You can use this field to group the different kinds of projects you carry out for clients. Using its values as a report filter, you can view income and expenses by job type.

Then, from the “Job Status” drop-down field, choose the job status. As the project develops, make sure to update this field’s value. Enter the “Start Date” field’s value as soon as the job begins. Next, enter the “Projected End Date” field with your best estimate of when the project will be completed. Enter the “End Date” field’s actual end date when the project is finished. Click the “OK” button to add the job to the “Customers & Jobs” list after entering the job details. Keep in mind that “Jobs” for “Customers” are listed here as “subaccount” entries.

How to Create a Job in QuickBooks Desktop Pro Instructions

  • Open the “Customer Center” window in QuickBooks Desktop Pro to create a job.
  • From the list of “Customers & Jobs,” choose the name of the client for whom you wish to create a job.
  • In the Customer Center’s upper left corner, click the “New Customer & Job” button.
  • The “New Job” window will then open after selecting the “Add Job” command from the drop-down.
  • In the “Job Name” field at the top of the window, type a name for the job.
  • Afterward, select the “Job Info” tab.
  • In the “Job Description” field, enter a description of the position.
  • In the “Job Type” field, specify the nature of the position, or select an existing entry from the drop-down menu.
  • Then, from the “Job Status” drop-down field, choose the job status.
  • Put the start date in the “Start Date” field when the job begins.
  • In the “Projected End Date” field, enter your best guess as to when the project will be completed.
  • In the “End Date” field, indicate the precise date the project will be completed.
  • To add the job to the “Customers & Jobs” list, click the “OK” button.

Understanding of Job Costing Structure for different Industries

Keeping track of a job’s expenses and comparing them to its revenue is known as job costing. The job costing tools in QuickBooks Desktop allow you to view the revenue and expenses for each job.

Make sure you have an accurate record of your job costs by following the procedures below.

Make sure each item is setup with sufficient information. The accuracy of your job cost reports will depend on how specific your item list is.

Step 1: Create a customer: Job for every single one of your jobs.

Even if a customer is the subject of just one job, create a separate job just for them. This enables you to keep track of your earnings and expenses on a job-by-job basis and can make bookkeeping easier if you add another job for that client in the future.

Step 2: Charge each expense to a specific job.

Assign all your expenses to jobs to get a complete picture of job costs. Choose the appropriate position within the customer: If you enter a bill, check, or timesheet, make sure to include the Job column.

  1. To record billable time, use either a weekly timesheet or a single activity entry to track the number of hours spent on the job. Give the customer or job the hours. Each entry is automatically verified in the form’s Billable column. Timesheets are a non-posting entry, please note. For it to be included in the Job Profitability or Company Financial Reports, time must be imported to a bill or invoice.
  2. Use a bill, check, or credit card charge to document purchases made for work-related purposes (items purchased for a job, subcontracted services). Enter each good or service you bought under the Items tab. Make sure to assign each product or service to the customer or job in the Customer: Job column.

Costing Reporting in Customer Centre

Keeping track of a job’s expenses and comparing them to its revenue is known as job costing. The job costing tools in QuickBooks Desktop allow you to view the revenue and expenses for each job.

Make sure you have an accurate record of your job costs by following the procedures below.

Step 1: Create a Customer: Job for every single one of your jobs.

Even if a customer is the subject of just one job, create a separate job just for them. This enables you to keep track of your earnings and expenses on a job-by-job basis and can make bookkeeping easier if you add another job for that client in the future. 

Step 2: Charge each expense to a specific job.

Assign all your expenses to jobs to get a complete picture of job costs. Choose the appropriate position within the customer: If you enter a bill, check, or timesheet, make sure to include the Job column:

  • Regarding billable time: Use a weekly timesheet or a single activity entry to track the hours worked. Give the customer or job the hours. Each entry is automatically verified in the form’s Billable column. Timesheets are a non-posting entry, please note. For it to be included in the Job Profitability or Company Financial Reports, time must be imported to a bill or invoice.
  • Buys for work-related purposes: (items purchased for a job, subcontracted services) Enter the purchase on a bill, check, or credit card charge. Enter each good or service you bought under the Items tab. Make sure to assign each product or service to the customer or job in the Customer: Job column.
  • Here are the calculations and tracking instructions for overhead costs, should you decide to allocate them to particular jobs. Before making any modifications to your company file, kindly consult your accountant.
  • For mileage: Enter the vehicle’s mileage in the corresponding field. You can adjust this expense’s amount on the invoice if you want to bill the customer more than the going rate.
  • To cover additional costs, Make a note of the costs on a bill, check, or credit card charge. Place each expense on the Expenses tab. Don’t forget to give each expense a customer or job in the Customer: Job column.

Step 3: Enter your estimates into the QuickBooks Desktop program:

  • Either inside or outside of QuickBooks, you can create your estimates. Simply enter summary estimates into QuickBooks if you’d rather make estimates using a spreadsheet or otherwise not using the program.
  • If you create estimates outside of QuickBooks but invoices inside of QuickBooks, you can easily convert your estimates into invoices by entering the necessary information in the Create estimates window.
  • Without entering estimates into QuickBooks Desktop, you can still use some job costing reports. But if you enter estimates into QuickBooks, you can use the full complement of Job Cost reports to make sure your project’s budget is on track. You can assess the estimates’ accuracy and make the necessary corrections for subsequent projects.

Note: You must choose which time and expense entries you want to convert to an invoice if you enter them on estimates, timesheets, and bills. For instance, when time is added to an invoice from an estimate and a timesheet, QuickBooks Desktop will not automatically match the two. This has to be done manually.

Step 4: Produce the necessary invoices

When creating invoices, be sure to select the appropriate Customer: Job.

If you’d rather create invoices outside of QuickBooks Desktop, be sure to enter at least a summary of each invoice so the program can include the revenue in the Job Profitability reports.

Step 5: Generate job costing reports to assess the performance of your company on a job-by-job basis

Job Reports can help you determine which jobs are profitable and which are not. It enables you to produce more accurate estimates, evaluate the financial progress of each job, and spot problematic jobs before it’s too late to turn them around.

Conclusion:

The use of small business accounting software is not an excuse for failing to keep track of your project’s costs. Even though it wasn’t created with these uses in mind, QuickBooks Online offers several feature sets that can be helpful for gathering and presenting some of the vital job data you need.

Make sure you’re making the most of your resources, gathering reliable cost data, and developing good habits that will help you succeed in the next stage of your growth if you use QuickBooks or simply aren’t ready for a full job cost accounting system yet.

General FAQs:

How can two reports be created in QuickBooks Desktop?

You can access two reports in QuickBooks Desktop to obtain this data. The Sales by Customer Detail report and Item list are available. Then, alter the report using the instructions below: Select “Customize Report” from the menu. On each report, look for the detail you want to produce. Add any additional data that is required. Okay, then.

The following step is to inform QuickBooks Online of our desire to track expenses by customer (and if necessary, tell it that we want to make expenses and items billable). In the Settings screen, click the “Expenses” tab, then select “Bills and expenses” to edit.

Without entering estimates into QuickBooks Desktop, you can still use some job costing reports. But if you enter estimates into QuickBooks, you can use the full complement of Job Cost reports to make sure your project’s budget is on track. You can assess the estimates’ accuracy and make the necessary corrections for subsequent projects.

An organization tracks all costs associated with a specific function using cost centres. Cost reduction is their primary goal. These divisions are in charge of incurring costs for the company, not producing income for it. This serves as a cost centre guide.

Keep in mind that “Jobs” for “Customers” are listed here as “subaccount” entries. Using the “Customer: Job” column in the line items area of your forms, such as the “Enter Bills” form, you can record earnings and outgoings for a job after you’ve created it in QuickBooks Desktop Pro.

In the “Job Name” field at the top of the window, type a name for the job. Afterward, select the “Job Info” tab. In the “Job Description” field, enter a description of the position. In the “Job Type” field, specify the nature of the position, or select an existing entry from the drop-down menu.

The job costing tools in QuickBooks Desktop allow you to view the revenue and expenses for each job. Make sure you have an accurate record of your job costs by following the procedures below. Make sure each item is setup with sufficient information. The accuracy of your job cost reports will depend on how specific your item list is.

The job costing tools in QuickBooks Desktop allow you to view the revenue and expenses for each job. Make sure you have an accurate record of your job costs by following the procedures below. Make sure each item is setup with sufficient information. The accuracy of your job cost reports will depend on how specific your item list is.

Drag the Diamond shape under the appropriate customer by clicking it next to the job. Click and drag the job once more to the right side, making sure it is aligned with the other jobs, after it has been placed beneath the customer. In case you need to deactivate the customer’s job so that it doesn’t appear in QuickBooks’ job posting reports.

Then, from the “Customers & Jobs” list, choose the name of the client for whom you want to create a job. In the Customer Centre’s upper left corner, click the “New Customer & Job” button. Then, select the “Add Job” option from the drop-down to display the “New Job” window.

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