Perhaps you are selling products together with installation and a warranty period for a fixed price. Perhaps you are selling fixed price service contracts. If these fixed price sales apply to you, then you must be able to calculate the profit on any job at any time. Knowing up to the minute profit gives you the ability to control installation costs before the job is complete. Knowing up to the minute profit on old service contracts gives you the ability to quote new service contracts more intelligently, increasing the profit margin on the new contracts.
The trick is how to compute job profit without adding staff. When using Job Costing with Starr Accounting, the only extra work is adding a Job Master record when the job is sold. All posting to the Job Master is done automatically by the Labor Distribution, Accounts Payable, Inventory, Order Entry, Accounts Receivable, and General Ledger systems.
Job Costing is an essential part of any business that provides goods and services on a fixed contract amount, and thus needs to know if the contract was profitable. Job Costing also applies to businesses that build a product, and thus need to know what it cost to build the product.
Gross sale amount is posted to the job record when the A/R sale transactions are generated (via Accounts Receivable or Order Entry). Costs are immediately posted to the corresponding job record when the labor, material, or other transactions are entered (via General Ledger, Purchase Order, Accounts Payable, Labor Distribution, and Inventory). Job profit is re-computed with each transaction entered, so you always know up to the minute profitability via a simple screen inquiry.
The "Job status" report provides full detail for prior to completion, warranty, and after warranty labor, material, and other for selected jobs.
The Starr Computer Systems Inc. Job Costing system is designed to:
The system maintains detailed information on each job including the job number, salesman number, customer key, description, budget data, completion date, warranty dates, and job profit. Transactions affecting Job Costing come from General Ledger, Accounts Receivable, Purchase Order, Accounts Payable, Labor Distribution, Inventory, Order Entry, and Job Costing. Job Costing transactions are created automatically by the various accounting subsystems, or may be entered manually as Job Costing transactions. The corresponding Job Costing master record will be updated by the transactions and the job profit will be immediately re-calculated.
Each program contains a complete set of prompts and other helpful messages that allow even an inexperienced operator to make full use of the system with minimal instruction time.
Particular features of the Starr Computer Systems Inc. Job Costing system include:
The Job Costing system operates with a Jobs Master file and a Transaction file. The Jobs Master file allows for the creation and Maintenance of jobs. The Transaction file allows for the recording of cost and billing transactions.
The Job Transactions are immediately posted to their corresponding Jobs Master record; thus you can bring up he Jobs Master record and determine up to the minute profit. J/C transactions are automatically created by the "G/L transaction file maintenance program", the "A/R transaction file maintenance" program, the "A/P transaction file maintenance" program, the "Labor Distribution transaction file maintenance" program, the "Inventory transaction file maintenance" program, from Purchase Order post receivings, and Accounts Receivable or Order Entry billing.
The J/C Master File contains the job number, salesman number, customer key, description, and various other information on warranty and completion dates, budget data, and expense data. The items within the Master File are maintained by the "Jobs master file maintenance" program. All information on all items may be listed by using the "Jobs master report" program.
Transactions may be applied at any time to the Jobs Master file via the various sources. The transactions may be listed by the "Transaction file" and "Job status" reports.
The "Job status" report is a detailed report which list the complete current status of the job, all the transactions that have been posted to this job, and the percentage of the expenses to the net sale amount.
The Job Costing system contains nine programs which collectively perform the creating, maintaining, updating, and report generating functions of the system. Each major program is briefly described below.
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