Job Costing and Project Budgeting
For information on the availability of Job Costing and Project Budgeting, please contact your account representative.
Job Costing and Project Budgeting help track project profitability and relate that profitability back to your general ledger.
Job Costing
Job Costing lets you calculate costs for labor based on tracked time, and account for those costs in your general ledger.
Job Costing utilizes a project expense type to determine which account project costs are attributed to when time is posted for that project. Project expense types can be set by the project or by the service item used when entering time. By default, Regular and Overhead project expense types are set up with direct and indirect labor accounts respectively. You can set up or edit project expense types at Setup > Accounting > Project Expense Types. For more information, see Creating Project Expense Types.
When you enable Job Costing, each project is automatically assigned the Regular project expense type. You can change the associated project expense type by editing individual project records.
When an employee enters time worked on a project in NetSuite the cost of that time is calculated based on the employee’s labor cost. After that time is approved, it can be posted. Posting time creates a journal entry debiting the account associated with the assigned project expense type and crediting the selected project cost variance account. For more information, see Posting Time Transactions.
If you use OneWorld, you can use Job Costing to transfer the associated cost of a resource from one subsidiary to another using the posting time function and intercompany time adjustments. When the time is posted, journal entries are created to account for the cost in your general ledger. The costs are reflected in real-time in on the project record P&L subtab and in the Project Profitability report. When closing an accounting period, intercompany journal entries are created to transfer the job cost from the employee’s subsidiary back to the project’s subsidiary. For more information, see Job Costing and OneWorld.
Project Budgeting
Project Budgeting lets you set cost and billing budgets for project labor and expenses at both the project and task level. When you enable the Job Costing and Project Budgeting feature, a Budget tab is added to set budgets on project and project task records. Budgets can be set up on a monthly basis. Budgets set at the project task level are rolled up to the project level.
Cost and billing categories that are available on the Budget tab are defined at Setup > Accounting > Accounting Preferences > Projects. From the project or task record, you can choose to define budgets manually by entering values on the Budget tab or you can have budget amounts set using calculated values. If you also use Resource Allocations, you can choose to automatically calculate labor budgets based on allocated resources. For more information see, Setting Up Project Budgeting.
Profit and Loss Subtab
When you enable Job Costing and Project Budgeting, a P&L subtab is added to project records. The P&L subtab displays the current revenue, cost, profit, and margin for your project. The information displayed is in real time and enables you to gauge the current profitability status of your project. The following information is displayed for each category:
|
|
Revenue |
Cost |
Profit |
Margin |
|---|---|---|---|---|
|
Labor |
Invoice amounts created from employee time-based charges Invoice amounts created from fixed fee charge rules Billable time on customer invoices |
Journal entries created from posting time tracked towards projects |
Revenue — Cost |
(Profit / Revenue) * 100 |
|
Expense |
Invoice amounts created from employee and vendor expense-based charges Billable expenses on customer invoices |
Approved employee expense reports |
Revenue — Cost |
(Profit / Revenue) * 100 |
|
Supplier |
Invoice amounts created from vendor time-based charges Billable items on customer invoices Items on customer invoices; including service items, non-inventory items, inventory items. Items from sales orders to invoices will display here. |
Approved vendor bills, except for inventory items |
Revenue — Cost |
(Profit / Revenue) * 100 |
Reporting
The following reports are available for Job Costing and Project Budgeting:
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Project Cost Budget vs. Actual
-
Project Billing Budget vs. Actual
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Project Task Cost Budget vs. Actual
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Project Task Billing Budget vs. Actual
-
Project Profitability
Budget vs. Actual reports are available at the project and project task level for both cost and billing budgets. These reports enable you to analyze budgeted and actual project financials to determine how closely your costs and billings compare to those you originally budgeted. The categories that appear on project level reports match those that are set up to appear on project budgets. Project task level reports include labor only. Both summary and detail reports are available at the Project level.
The Project Profitability Summary and Detail reports compare actual project revenue and costs to show each project’s profitability. The report is organized by project and further broken down into categories.
Each of these reports are available to be customized with the NetSuite Report Builder. To view these reports, go to Reports > Projects. For more information, see Project Management Reports.