Q: I handle a variety of jobs for customers – some building, some remodeling, some handyman-type work. I usually inactivate those jobs in my “Customer: Job” list when we’re done with them. But then, six months or a year later, I might need to go back to take care of warranty work. How do I set up and post warranty costs? Should I reactivate those old jobs and post the costs there?
A: Here’s a technique that most of my clients like:
Rather than reactivating those old jobs (and having warranty costs – usually minimal – for each of those old jobs show up on your Profit & Loss by Job Reports), simply set up a job called “zy.Warranty Work.” (The “zy” should place it at the bottom of your Customer:Job list when you re-sort it, and at the end of your P&L by Job Reports.)
Then, whenever you incur costs related to warranty work, just assign it to this “special” job. Advantages to this approach include:
- By looking at your Profit & Loss by Job Report, you can see how much you are spending in the “zy.Warranty Work” for warranty work performed each month and each year.
- As you monitor this total, you’ll be able to more accurately budget for warranty costs in the future.
- If you’re using items to indicated job stage (as I always recommend), each transaction will be entered using the correct item based on which part of the job needed warranty work (e.g., windows, trade contractor, plumbing, materials, lighting, labor, etc.). You’ll be able to see recurring “trouble spots” so that you can avoid them in the future.
- Labor costs, trade contractor costs, and materials costs will post to the correct accounts, which is important when you need to prepare 1099s at year-end or match up payroll costs to payroll reports.
- If you also indicate the name of the (original) job in the memo field, when you review the detailed reports for the “zy.Warranty Work” job, you’ll be able to see exactly which of those old jobs required the warranty work.
--Diane Gilson (email@example.com) created the accounting firm of Info Plus(+) Accounting in 1994 with the intent of providing current and future-oriented management accounting services to small- and medium-sized businesses. Since the firm’s inception, Diane has worked exclusively in QuickBooks – a powerful, flexible, multifunctional software accounting system currently used by 70% to 85% of small- to medium-sized businesses in the U.S. She is a Certified QuickBooks Advanced Professional Advisor and Certified QuickBooks Enterprise ProAdvisor (through Intuit), and a Certified QuickBooks consultant (through the Sleeter Group Consultants Network).