I set up the items for my company incorrectly and I am trying to fix it. I've just recently started using QB:Premiere Contractor's Edition 2018 (desktop) but I have quite a number of transactions in it that would be a total headache to have to start over from scratch on.
What I did wrong: I made all of the items in my item list so that they booked to a single account.
What I should have done: After some online research, I realize that I should have set the items up so that they book into a " Construction In Progress" account in order for them to show up as a fixed asset while the project is under construction. I should have checked the "This Service is Used in Assemblies..." box and designated the CIP account.
What I am trying to do: So I am trying to go back into each item and check the "This Service is Used in Assemblies..." box and designate a CIP account. When I do this QB asks me if I want to do this change for past transactions. I would like to have it done for past transactions so I click "yes". It does indeed move the transactions into the CIP account and I can see them in the ledger but the problem is that when I go and look at a job profitability report for the purchases under that item they no longer show up for that customer/job. I've checked the transaction and the "Customer:Job" is still properly filled in. It does show that there is a split on the transaction when I look at it in the CIP account leger.
Does anyone have an idea of why the transaction is disappearing from my job profitability report? Please let me know if I need to clarify anything.
The entire reason for using the "CIP" method of accounting is so that 'expenses' are not recognized upon purchase - instead they are capitalized to CIP and will later be expensed to match revenue flow. So in the P&L report there is no expense (yet). If you have started to recognize revenue from the project then you need to expense some(all?) of the CIP.
Ahhh! That makes sense. Do you know if there is anywhere that discusses how to go through the process of expensing CIP once you receive an interim payment or final payment in QuickBooks? Thanks for your answer, that cleared up the theory for me!