Show itemized breakdown of charges?

I'm a sole proprietorship and will be beginning a project where the client (US government) would like to see a break down of direct and indirect charges in the accounting. Can QuickBooks do this? That is, can I show and itemized breakdown of charges for a given invoice?

Ex: Invoice #1: $1000 Direct Labor Charges: $600 Labor O/H: $300 Facilities O/H: $100

I don't use QuickBooks but my accountant does, and he wasn't sure if QuickBooks could do this (which is why I'm asking here).

Thanks for any feedback or advice.

Pat

Reply to
Pat
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Your accountant will probably have to set up each item as a seperate account and the government invoice would show each charge seperately.

Most accounting software at the qb level would be the same unless you invest in specialty accounting software for your industry or higher end accounting software (eg ACCPAC).

Reply to
oscar_01

Yes.

Reply to
Allan Martin

Would this involve setting up separate accounts for each item, as oscar_01 indicated? Is this capability available in all versions of QuickBooks? I think my accountant has an older version which is why I ask.

Thanks again for you help.

Pat

Reply to
Pat

Your accountant, rather than you, should probably ask the question as he presumably has a better idea of specifically what is required and why he is doubtful about QuickBooks' ability to do it. On the other hand, one might wonder why your QB expert even needs to ask the question, why he either doesn't already know or can't figure it out.

What does "in the accounting" really mean? I'm a 30+ year licensed professional accountant and almost-10-year Certified QuickBooks Pro Advisor, and I don't know what that means.

If it's sufficient to show this detail on the Invoice, perhaps it is sufficient to create those 3 Items which might post either to separate income accounts or all to a single income account. If it's necessary to have separate income accounts as suggested by Oscar, you would need the 3 Items anyway. If this won't work, why not? Why doesn't your accountant ask your questions - or answer them?

Reply to
!-!

Thanks. I guess that might work, although it sounds a little awkward. The alternative though is making myself an employee and setting up a payroll, which I would like to avoid.

Pat

Reply to
Pat

Yes, QB can do this.

I see you have answers here suggesting that your accountant solve these issues. That answer makes much sense to me. In QB manuals it often refers to having your accountant set up your accounts, etc.

Here's how I see it.

First, there is a bookkeeper. That person does the daily work of entering transactions, etc. This person would not necessarily have the knowledge of tax matters, etc. that an accountant would have, and I don't think they generally get paid a whole lot. The bookkeeper would generate invoices, enter bills, etc.

The accountant would take the results of the data entry and figure out how taxes are paid, etc.

However, what I have run into in real life is that many accountants (like ours) often don't really know how to set up QB, and don't offer much (or any) help.

I applaud those that do.

The bookkeeper we had also did not understand QB, nor was she good at learning it (like in reading a book). Nor was she accurate or good at organizing.

My solution was to buy the "Contractor Edition" QB for the company I work for, and delve into the bookeeping and setting up of QB for our purposes.

And unload the lady who had set it up before, in a very confused manner, and who made lots of confusion and errors.

What has worked for me is to get a book. The one I got is: Quickbooks 2006, The Missing Manual. I'm sure there are other books that are helpful as well.

Also the sample companies that came with the Quickbooks version I got were very helpful.

At this point I'm a newbie getting his feet wet. It's a lot of work figuring out how to organize QB and fix the 4 years of confusion. At some point when it isn't so confusing, and I have gotten QB set up the way we need, we will probably hire a bookeeper and I'll show that person how we want the data entry to be done.

So I will be one of the people on this NG asking for advice on how to do things.

Chips

Reply to
Chips

I don't know why you think it is "awkward". To answer another of your questions, this capability has existed in every version of QuickBooks from the beginning of time (except possibly the EasyStart version which I have not used).

I remain puzzled why your accountant can neither ask nor answer these questions.

Reply to
!-!

QB has always been able to do this starting with version 1.

Reply to
Allan Martin

Her accountant is most likely looking at the 40 pages of legalese about what is or is not a overhead charge on this particular contract. It's not that QB can't show it, it may be that each invoice needs to be put through a huge complex excel sheet to see how much each category on the invoice will be. And it may be that the numbers needed to be plugged into this excel sheet aren't going to come out of QB's reports without a lot of work.

I'm saying this because it is so trivial to create the invoice, except for the amounts to put on each line, and I'm sure the Government wants to see how it is calculated. When client's ask a question like this, you can be assured they didn't understand the problem.

Reply to
Golden California Girls

It's dealing with the government. The following almost always works (remember, it'll be reviewed by government employees):

Parts $31.55 Misc $8422.56 Total: $8454.11

Reply to
HeyBub

Only your good friends will tell you that you drool a little when your tongue's in your cheek like that!

"HeyBub" wrote ...

Reply to
!-!

"It MAY be that...." "....they didn't understand the problem...." etc.

- Which is why I suggested that the accountant ask the questions and explain the problem.

"Golden California Girls" wrote ...

Reply to
!-!

I guess "awkward" was a poor choice, and since I don't know QuickBooks (not yet at least) not really justified. I shouldn't have said that.

The reason I'm asking and not my accountant (who is really functioning more as a book keeper) is that he said he didn't know how such a thing would be done (implying that it couldn't be). I have the impression he is not that computer savvy, and has been using the same version of QuickBooks for the past 7 years (QB 99). Also, I know from my own experiences that it is very easy to only use 10 to 20% of what a software package is capable of . So I thought I would check with the experts here, in case this capability was maybe hidden or in a newer version, and point him in the right direction if needed.

Thanks for your reply.

Reply to
pat

The government has an auditing agency (DCAA) that will periodically audit our books to make sure all our charges and rates are appropriate. The main problem is that right now as a sole proprietorship I take a "draw" to pay myself and spouse for work we've done. This draw apparently isn't recorded in the ledger or balance sheet, so they want us to show a "payroll". We don't want to make ourselves employees just for this, so I was trying to come up with some other way to show them what they want, while still keeping the bookkeeping simple. Since we need to track overhead also, I thought providing some breakdown of all the direct and indirect charges might kill two birds with one stone. BTW, this break down would include more items than what I indicated in the OP (that was just an example of what I had in mind generally).

If you have any suggestions I would very much appreciate hearing them. I'm trying to avoid having my (or my accountants) ignorance lead us into something that isn't really best for my business. Although I agree my accountant is the one who should be investigating this, he didn't seem too inclined (he only does this part time), and since I'm the one who ultimately has to live with the result I thought I would look into it (at least enough to know what I should "suggest" to him).

Thanks for your help.

Reply to
pat

Oh boy. Now I get the picture. I'm not sure your books got set up right to begin with, however when you take a draw, what account gets the debit and what account gets the credit? Hopefully we have cash (bank account) and an equity account. Equities aren't expenses which is why it won't show on any P&L type report.

That may not be possible. Here is why. As a sole proprietor anything you make is considered profit and your draw is an advance payment on that profit. The government is interested in tracking costs. It may well be that they won't allow your draw to be counted as a cost. Better read that contract carefully.

Suggestions, export the permitted overhead costs, from a suitably filtered P&L report, except for your draws to an excel spreadsheet. Export your draws, a different report, to another tab on that workbook. Add the line for payroll expense the government wants to see. Fill in the amount of both your draws. Make sure the formulas for all the sub totals and totals include your new line. Multiply by the amount for this government contract, hit save and print, then enter it on the invoice. (I'm assuming that the contract only allows the percent attributable to the contract to be billed. May need to get the multiplier on another tab on the worksheet with whatever reports are needed to show that e.g. time sheets, job cost reports, P&L's)

You didn't mention if the contract allows for depreciation to be counted as a cost. Unless you are running a recent accountant edition of premiere or an enterprise edition you are going to be doing this on some other software.

I don't see any reason, baring some legalese, that QB (a newer high end version) and Excel can't do everything you need.

Gary

P.S. Don't know if your version of QB has the ability to export to excel as I'm not up on old versions.

P.P.S. Might be time to look into another bookkeeper, one who knows excel and how to do job cost accounting in QB. You may have a great A/P-A/R data entry clerk, but you may be graduating into needing an accountant.

P.P.P.S. You may need to beef up a lot of your accounting practices to do the job costing such as making sure charge numbers get onto freight bills, PO's etc. You didn't mention if you had employees or just independent contractors but that accounting may need to be beefed up as well.

Reply to
Golden California Girls

Many accountants that receive QuickBooks data files from their clients at the end of the year only need to work with the trail balance, general ledger, journal entires and printing financials. Using the day to day functions such as creating invoices, receiving cash etc. is not required.

Reply to
Allan Martin

Thanks Gary for the additional feedback. I'm planning to meet with my accountant soon (the one who does my taxes, not my bookkeeper) and discuss this all with him. I've also thought it might be time to look for another bookkeeper, or just take over that job myself. We don't really have that many items to keep up with, but I've avoided doing it (and using a bookkeeper instead) mainly because I haven't wanted to take to the time to learn QuickBooks. Maybe now's the time!

Thanks again. -Pat

Reply to
Pat

Chips,

Thanks for the feedback. I've also come to the conclusion that I'm going to have to delve into enough of the accounting and QuickBooks to understand what's going with it all. I'm planning to meet with my tax accountant (not bookkeeper) today to see if I can get this all sorted out. I'm hoping with his help we can get things set up well enough to keep the go's auditors happy, while still keeping the bookkeeping simple. We'll see!

Thanks for sharing your experiences. Out of curiosity, why did you choose the contractors edition of QB? I'm wondering if that would be a better choice for us also, since our work mainly project oriented (service oriented) as opposed to retail sales.

Pat

Reply to
Pat

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