As a sole-proprietor owner, your time is not a cost to the company - to you - so actually entering a cost in order to see it on financial reports is inappropriate.  For the same reason you cannot donate your time and write it off as a donation, because it has no value (sorry.)

Still, you could use the Time tracking feature in QB to record your time, just so you know where you're spending it.  And then outside of QuickBooks you could mock up a report based on what you think your time is worth.

I did not ask the question so I could do something that goes against IRS or federal tax rules.  I understand I need to report my income in a certain way as an LLC to the IRS, and I have no problem complying with that. With all due respect, what is appropriate in how I want to report on so that I feel my company is more or less successful is up to me, not anyone else.  My time DOES have value, and really is the one of the few things that cannot be replaced in the operation of my business.

The benefit of understanding Job Profitabiity while accounting for my time as the owner of a single member LLC spent on that project, is to better understand the drivers for and make better decisions to achieve increased profitability.  Without allocating a value to my time, it can greatly affect the profit. For example, suppose I spend 100 hours to complete Project XYZ, but only 20 hours to complete Project ABC, and the value of my time is $50/hr.  And suppose the QB P&L for the jobs shows $6,000 profit for XYZ, and $3,000 profit for ABC. Now suppose for simplicity that the total cost I charged the customer for each project was $50,000.  By looking at the QB P&L, I would see a 12% profit for XYZ, and only a 6% profit for ABC, and so may conclude that the XYZ project was more profitable and so I should try to replicate everything I did in XYZ in future projects vs how they were done in ABC.  But, if I include the cost of my time, then the P&L (w/owner allocation) Reports for each job would show $6,000 - $50 x 100 = $1,000, for XYZ, and $3,000 - $50 x 20 = $2,000 for ABC. This changes the picture completely, with ABC profit that is twice that of XYZ. After looking at these reports, I might see that the reason ABC was more profitable was because I used a subcontractor for a portion of the work which helped reduce my time on the project, which might give me insight into how better to plan future projects for maximum profitability, and how it might free up my time to work on other things, like sales. With accurate reporting, along with good forecasting, I could better determine how overall profit might be impacted by where I spend my time vs hire employees or subcontractors.

As I stated in my original post I did see a solution in a different post.  I went back and played around with the zero dollar "write checks" entry and I found that if I made the Expense entry a positive amount, and the Item side enty a negative amount, and had the job name selected in the field for both sides of the entry, I got a 0.00 cost in the Job P&L report, so therefore no change in reporting from the standard job profitability report. But if I removed the Job name from the Item side, so that the job name is only apled to the expense, then the report did allocate my time as an expense on the report, effectively lowering the profit and giving me the info I needed.

If there is a better way to do this, I would like to hear it. I don't know whether there is some negative impact that would show up on some other report, of having the Item side not include the Job name, but this seems to work in allocating the cost of owner time to a job.

I did not ask the question so I could do something that goes against IRS or federal tax rules.  I understand I need to report my income in a certain way as an LLC to the IRS, and I have no problem complying with that. With all due respect, what is appropriate in how I want to report on so that I feel my company is more or less successful is up to me, not anyone else.  My time DOES have value, and really is the one of the few things that cannot be replaced in the operation of my business.

The benefit of understanding Job Profitabiity while accounting for my time as the owner of a single member LLC spent on that project, is to better understand the drivers for and make better decisions to achieve increased profitability.  Without allocating a value to my time, it can greatly affect the profit. For example, suppose I spend 100 hours to complete Project XYZ, but only 20 hours to complete Project ABC, and the value of my time is $50/hr.  And suppose the standard QB P&L for the jobs shows $6,000 profit for XYZ, and $3,000 profit for ABC. Now suppose for simplicity that the total cost I charged the customer for each project was $50,000.  By looking at the QB P&L, I would see a 12% profit for XYZ, and only a 6% profit for ABC, and so may conclude that the XYZ project was more profitable and so I should try to replicate everything I did in XYZ in future projects vs how they were done in ABC.  But, if I include the cost of my time, then the P&L (w/owner allocation) Reports for each job would show $6,000 - $50 x 100 = $1,000, for XYZ, and $3,000 - $50 x 20 = $2,000 for ABC. This changes the picture completely, with ABC profit that is twice that of XYZ. After looking at these reports, I might see that the reason ABC was more profitable was because I used a subcontractor for a portion of the work which helped reduce my time on the project, which might give me insight into how better to plan future projects for maximum profitability, and how it might free up my time to work on other things, like sales. With accurate reporting, along with good forecasting, I could better determine how to optimize profit by seeing where I should spend my time vs hire employees or subcontractors.

As I stated in my original post I did see a solution in a different post.  I went back and played around with the zero dollar "write checks" entry and I found that if I made the Expense entry a positive amount, and the Item side enty a negative amount, and had the job name selected in the field for both sides of the entry, I got a 0.00 cost in the Job P&L report, so therefore no change in reporting from the standard job profitability report. But if I removed the Job name from the Item side, so that the job name is only applied to the expense, then the report did allocate my time as an expense on the report, effectively lowering the profit and giving me the info I needed.

If there is a better way to do this, I would like to hear it. I don't know whether there is some negative impact that would show up on some other report, of having the Item side not include the Job name, but this seems to work in allocating the cost of owner time to a job.

Hi Solarken,

I have the exact same question. I think I may have found the same post you referred to with the negative expense and found that I had the same issue (it zero's out on the project level report). I'm also worried about removing the class from just the item side....have you found a workaround to this?

Thanks for joining in this thread, @userl-johnson.

I have here the workaround on how how to allocate job cost in Quickbooks Desktop (QBDT). 

I agree with BigRedConsulting that you can use time tracking to track the job cost. This way, you can track the expenses for a job and comparing those expenses to your revenue. Also, you can see how much money you spend and make for each job.

To begin, let's make sure that your item is set up correctly. Thus, your job cost reports are accurate and precise. Once confirmed, you can now set up a Customer: Job for each of your job. 

Here's how: 

1. Go to the Customers menu, then choose Customer Center. 
2. Right-click the customer name and choose Add/Edit Multiple Multiple Customer:Jobs. 
3. Follow the onscreen instructions. 

After that, you can now assign all your expenses to jobs. Choose the suitable job in the Customer: Job column whenever you enter a bill, check, etc. The next step is to create estimates and invoices in your account. For the complete instructions, refer to this article: Tracking job costs in QuickBooks Desktop.

Once everything is done, I'd recommend running the job costing reports to see how your business is doing on a job-by-job basis.  See the available reports below for your reference: 

I've also added some articles about handling classes, costing, and customizing reports. 

• Set up job costing and item tracking
• Understand reports

Keep me posted if you have other questions about job costing in QuickBooks Desktop. I’m always here to help. Have a great day ahead!

QuickBooks Tip: Applying Owner’s Time for Job Costing

My daughter in law and I  have a LLC partnership business.  She contributes her time while I contribute funds.  My question is how do I  show her input as labor.  We haven't paid ourselves anything yet.  We are a 50/50 partnership. 

Laurie 

Hello, @badlandscraftygirls 

Allow me to share some insights about inputting your daughter as a laborer.

Time tracking enables you to accurately record the hours worked by each employee, including any overtime or time off. This helps ensure that employees are compensated correctly for their work.

First, you can set the format for time entries which has two time formats: decimal and minutes. You can change the format from decimal to minutes and vice versa. Then you can set up time tracking in QuickBooks Preferences and here's how:

1. Go to Edit, then select Preferences.
2. Select Time & Expenses, then Company Preferences.
3. On the Do You Track Time? section, select Yes.
4. On the First Day of Work Week dropdown, select the day your work week begins.
5. Select OK to save the changes.

Next, Set up your employees for time tracking:

1. Go to Employees, then select Employee Center.
2. Double-click the employee's name.
3. Select Payroll Info.
4. Select Use time data to create paychecks, then OK.
5. Repeat steps 2–4 to applicable employees.

Additionally, it's recommended to consult a legal or tax professional to ensure that the documentation is in compliance with relevant regulations and to avoid any potential issues in the future.

You can run a Payroll Summary report in QuickBooks for any date range or group of employees if you want to track your payroll totals, including employee taxes and contributions.

If you have further questions about inputting your employer as your partner, you can comment below and we'll respond to you as soon as possible.