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MikeyB
Level 2

Allocating Inventory to a Job

Hello - what is the correct process to follow when allocating inventory items to a particular job (for job costing purposes).... but you do not want those items to appear on the invoice... but still want your inventory levels to reflect the correct quantities?

 

We are a construction company, and our customers accept quotes for the total project costs.

We invoice the customer the quoted price (ie: $10,000 for a project/renovation), and then use materials out of our inventory to complete the work.   How do I post entries within QB Desktop to reflect the materials used for a particular job (DR: cost of goods sold,  CR: Inventory), but not have the program create the sales side of the transaction?

 

Thanks in advance for your help!

Solved
Best answer August 27, 2021

Best Answers
katherinejoyceO
QuickBooks Team

Allocating Inventory to a Job

Hi there, @MikeyB

 

Thanks for sharing what you need to achieve today. At the moment, the ability to transfer Inventory to a Job is unavailable in QuickBooks. However, you can search for a third application that can integrate with QuickBooks. 

 

To look for an app using Dekstop, click on this link: QuickBooks third-party apps.

 

For future reference, read through this article and learn more about reports in QuickBooks Desktop.

 

Let me know if you have more questions. I'll be right up to help you more. 

 

 

View solution in original post

19 Comments 19
katherinejoyceO
QuickBooks Team

Allocating Inventory to a Job

Hi there, @MikeyB

 

Thanks for sharing what you need to achieve today. At the moment, the ability to transfer Inventory to a Job is unavailable in QuickBooks. However, you can search for a third application that can integrate with QuickBooks. 

 

To look for an app using Dekstop, click on this link: QuickBooks third-party apps.

 

For future reference, read through this article and learn more about reports in QuickBooks Desktop.

 

Let me know if you have more questions. I'll be right up to help you more. 

 

 

MikeyB
Level 2

Allocating Inventory to a Job

Thanks so much for the reply.   That does solve the mystery.... the functionality to transfer inventory items to a particular job does not exist currently in QB.

 

Hopefully it will be a function added in future editions! :-)

Rea_M
Moderator

Allocating Inventory to a Job

I can see the benefit of being able to transfer inventory items to a particular job will aid you in running your construction company with QuickBooks Desktop (QBDT), @MikeyB. That's why I'm here to share further details about this.

 

We take your suggestions for transferring inventory items to a job as an opportunity on which area of the product's feature we need to improve on. With this, I encourage you to send feedback or product recommendation.

 

Your valuable feedback will be forwarded and reviewed by our Product Development team to help improve your experience while using the program. Here's how:

  1. Go to the Help menu.
  2. Choose  Send Feedback Online.
  3. Click on Product Suggestion.
  4. Click on the drop-down for Type of Feedback and select Product Suggestion.
  5. Select the Product Area.
  6. Then enter your thoughts and suggestions.
  7. Once done, select Send Feedback.

 

I've attached screenshots below for your reference.

 

Also, I'm adding this article to further guide you in managing your business growth and inventory transactions in QBDT: QuickBooks Help Articles for Inventory Management. It also includes related articles about bills, payments, and inventory values, to name a few.

 

I'm all ears if you have other inventory concerns and tracking job costs in QBDT. You can drop your comment below, and I'll gladly help. Take care always, @MikeyB

Fiat Lux - ASIA
Level 15

Allocating Inventory to a Job

@MikeyB 

Inventory management features in QBD are only suitable for retail/wholesale/manufacturing companies. I am not sure they will create an additional feature for a construction company. Consider having a construction management app to integrate with your QBD. You may generate a report like this one later.

 

inventory in construction maangment app.jpg

 

MikeyB
Level 2

Allocating Inventory to a Job

@Fiat Lux - ASIA 

 

Thanks for the reply.   The report you posted is essentially what I am looking to generate by job, however it appears that QBDT has the limitation of not being able to allocate inventory directly to a particular Customer:Job.... when there is a fixed fee contractual pricing arrangement in place.    The program wants to continually invoice for the inventory parts allocated, rather than just track the COGS allocation.

 

I've remitted a suggestion request within QB to the technical development team to see if this can be addressed in future version of the program.

 

Thanks again for your reply

boomerjbm3
Level 1

Allocating Inventory to a Job

Have you tried using the "Adjust Quantity" transaction to post the inventory items used on your job?  If you assign the adjustment to your specific job, it should do exactly what you're wanting:  reduce the inventory item levels and charge the cost of the inventory items to your specified job.   Just make sure when running your Job Profitability report to change the filters so that it picks up "All" accounts, not just "Income/Expense" accounts.

Angela-Thews
Level 3

Allocating Inventory to a Job

I am also looking for a solution to this question. We have the Contractors QBDT. Like most contractors, we have items that are in our Inventory that we need to bill to specific jobs. But I have yet to figure out a way to show what we have used out of inventory on my Job Costing reports? The reports will show my Vendor bills that have been posted to a job, but if the boss wants a "Complete" job cost breakout then I need to be able to show what the guys have pulled from inventory and used at the job. Does anyone know how this can been done? Thanks in advance for any help with this! Angela @Angela-Thews
KA24
Level 2

Allocating Inventory to a Job

I have the same problem in our cabinet manufacturing business. I want the Job Profitability report to show the pieces of plywood that we take from inventory for the job. The only thing I've come up with, is to go back to the original vendor invoice and reflect that 2 pieces of plywood were for a certain customer. Very burdensome. The reports are useless as they are right now because we don't know the Actual Cost of the job.

howdenbros
Level 1

Allocating Inventory to a Job

Hello, our accountant has set up two separate chart of accounts. Inventory and CIP for each item. When inventory is purchased it’s posted to the inventory account, we keep track on a spreadsheet system to track items pulled  from inventory, then manually do a journal entry from inventory to CIP account for that item. Once the job is completed and billed out, another journal entry is made from CIP to COGS. A lot of entries and recording but it works.

Mackeyloo
Level 1

Allocating Inventory to a Job

We are a construction company too.  I have set up the inventory item to hit WIP for both Cost and Sales.  I have also set up an Inventory Transfer item code that also post to WIP.  In the invoice I charge the customer for the inventory and then enter in the inventory transfer item code as a credit to create a zero invoice.  The net result is a reduction to inventory and an increase to WIP for the customer.  Perfect!

SEK07122022
Level 1

Allocating Inventory to a Job

This does work great for increasing the WIP account and reducing inventory, but when I look at the JOB COST DETAIL report by this customer it is showing a debit and credit and the net job cost as zero.  Is there something that I am missing or a work around that will allow me to see the cost increase to this customer job? 

Giovann_G
Moderator

Allocating Inventory to a Job

Thanks for joining the thread, SEK07122022.

 

I understand how critical it is for you to see the cost increase for each customer job. Currently, it isn't possible to see the increase in cost per customer's job.

 

You may manually enter the data after exporting the Job Cost Detail report to Excel as a workaround. To do this, click the Excel dropdown and select Create New Worksheet.Capture2.PNG

 

I'm also adding this article to learn more about running and customizing reports in QuickBooks Desktop: Understand reports.

 

You can memorize your report if you wish to save your current customization. Check out this resource for a complete guide: Memorize report.

 

You're welcome to post again if you have further questions about tracking job costs. We're here to help you.

KA24
Level 2

Allocating Inventory to a Job

I've found that if I make a Job of the original Customer Job, then I can get a Job Profitability report from the customer page that will show inventory used against that job.

So it's Smith:Smith - everything then is coded to the Job name and I can get a good profit report.

Andog1
Level 2

Allocating Inventory to a Job

Another way to accomplish this is to create a Sales Order rather than a job, at least for the stocked inventory items.  Each item goes on the SO line with a zero selling price.  Associate the job number to the SO, and it should appear in the Job Profitability report once you create the no charge invoice to the customer from the SO.  Of course, you do not send this invoice to the customer.  An additional nicety of this activity is that all of the quantities you put on Sales Orders will also show as Allocated Quantities in your inventory item screens.  This can be helpful if you want to maintain a certain stock of of some commonly-used items. 

Sparky_Marky
Level 1

Allocating Inventory to a Job

Great idea with using Sales Orders and zeroing out cost.  Question, how do you track Use Tax per the items you transferred out of inventory?  Thanks!!

feofen
Level 1

Allocating Inventory to a Job

Hi

it is possible as long as you are doing costing and not selling inventory items. Must create some account ledger and items to work that way. Once it is set it is easy to allocate multiple inventory items to multiple jobs. 

JoshuaJH
Level 2

Allocating Inventory to a Job

Agree with this.  Creating SO's seemed to be the only way to relieve inventory to actual sales.  

 

It's really kinda crazy to me though that there is no inventory allocation module.  

JB349
Level 1

Allocating Inventory to a Job

I am trying to solve this problem too.... came up with this...
To allocate inventory to lump sum per quote jobs.
I invoiced the job as usual "Total Per Quote $40,000.00" and presented it to the customer for payment.
I then created another invoice listing the inventory parts and quantities totaling $8,000.00
I created a discount item called "inventory discount" that is "non tax" linked to my sales account.
I enter $8000.00 to remove the increased sales created by the inventory asset moving to the COGS Material account and there by increasing my sales account on this invoice.
I have another discount item called "inventory sales tax discount" that is also marked "non tax" linked to my sales account.
I enter the amount of sales tax $800.00. This now makes my invoice zero 0.
The way to think about it is that technically the customer already paid this invoice in the lump sum per quote amount. The customer will never see this invoice. You moved your inventory from assets to expense and hit the profitability report for that job. AND the sales tax is waiting for you to pay in your Sales tax liability account.

This is how we are going to do it.... if you see any flaws please let me know.... all my testing seemed to affect every account the right way.

 

ExcelGuy88
Level 1

Allocating Inventory to a Job

Would you mind giving further instructions on how you completed this? I have tried and can't figure out how to have the value show in projects while also being deducted from inventory qty and assets.

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