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How do I account for labor and costs on an invoice/sales receipt without showing the customer the information?

I'm just setting up quickbooks and am not sure how to handle labor. I create jewelry and use a number of pieces, i.e. ear wire, beads, findings, etc. I want to have one line item on my sales receipt or invoice that states "Angel earrings" and a price. The line item should account for the cost of all the pieces and the labor that went it to its creation, but I don't want the customer to see the breakdown. What is the best way to do this? Do I need to enter time on a timesheet, then add it to the invoice/sales receipt? Do I use assembly item, then build or group item?  I've done some research and find myself even more confused, thanks in advance for your help!

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Best answer 12-10-2018

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"I create jewelry" Are you On Payroll? The Labor cost is...

"I create jewelry"

Are you On Payroll? The Labor cost is an Actual value; or, as the Owner of a sole proprietorship, you are not a Cost to your own business.

"I want to have one line item on my sales receipt or invoice that states "Angel earrings" and a price."

Yes; this is your Sale.

"The line item should account for the cost of all the pieces and the labor that went it to its creation"

No. You set the Price for Sales to cover your costs of being in business and the direct costs associated with production of the specific item. None of this is shown to the customer or part of the sale. This is your Source data for setting Prices and for managing costs, so that your Price stays competitive.

"Do I need to enter time on a timesheet, then add it to the invoice/sales receipt?"

Time is Tasks, not Money. You would never show your customer the Time; you are not Billing them for Time. You are not a service provider. You can certainly track your time, to see how long it takes you to produce your products. Then, you would value your time, to achieve a marketable Price. This is business Planning and management.

If you Create for Inventory, and pay payroll, then you are asking about Invested Cost into Production in Inventory, which is a completely different concept. That is a Manufacturing process, not a "custom design and sales" creation business. Are you making these to order, or making 5,000 to put in stock and keep on hand in anticipation of sales? Are you on payroll?

"Do I use assembly item, then build or group item?"

Assembly item = you have bunch of Inventoried components, and you will use them Consistently to create the same finished product that you Build to have in stock. This is Inventory Management. Example: You keep computer power supplies in stock for spare parts and to Build into computers, because you also always want to have 5 completed computers on the shelf to sell, if a Client walks in and wants one right now.

A Build is not used for that client who asked for a Custom Build. That would be Group item = listing on their sale the specific items taken from inventory for their Custom System that you only put together for them, for this one time need.

Both of these process will remove the inventory components from Inventory.

Or, Group item = you offer a necklace with various pendants = make different Group Items, to sell me "3 Group name = pink pendant on necklace" and "4 Group name = green pendant, on same necklace."

It eliminates you needing to manually list those details.

"I've done some research and find myself even more confused, thanks in advance for your help!"

Start with some basics:

You cannot list Expense for things still in stock of significantly value. The IRS requires you to Hold the value until the Sale happens. That is called Inventory Asset. You spend money (an asset) on Stuff (an asset). See how you have not actually Spent anything, yet. Next, it matters as to the significance (dollar amounts). You can do Periodic Inventory management. You don't expect a bakery to track every tsp of yeast.


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Established Community Backer ***

"I create jewelry" Are you On Payroll? The Labor cost is...

"I create jewelry"

Are you On Payroll? The Labor cost is an Actual value; or, as the Owner of a sole proprietorship, you are not a Cost to your own business.

"I want to have one line item on my sales receipt or invoice that states "Angel earrings" and a price."

Yes; this is your Sale.

"The line item should account for the cost of all the pieces and the labor that went it to its creation"

No. You set the Price for Sales to cover your costs of being in business and the direct costs associated with production of the specific item. None of this is shown to the customer or part of the sale. This is your Source data for setting Prices and for managing costs, so that your Price stays competitive.

"Do I need to enter time on a timesheet, then add it to the invoice/sales receipt?"

Time is Tasks, not Money. You would never show your customer the Time; you are not Billing them for Time. You are not a service provider. You can certainly track your time, to see how long it takes you to produce your products. Then, you would value your time, to achieve a marketable Price. This is business Planning and management.

If you Create for Inventory, and pay payroll, then you are asking about Invested Cost into Production in Inventory, which is a completely different concept. That is a Manufacturing process, not a "custom design and sales" creation business. Are you making these to order, or making 5,000 to put in stock and keep on hand in anticipation of sales? Are you on payroll?

"Do I use assembly item, then build or group item?"

Assembly item = you have bunch of Inventoried components, and you will use them Consistently to create the same finished product that you Build to have in stock. This is Inventory Management. Example: You keep computer power supplies in stock for spare parts and to Build into computers, because you also always want to have 5 completed computers on the shelf to sell, if a Client walks in and wants one right now.

A Build is not used for that client who asked for a Custom Build. That would be Group item = listing on their sale the specific items taken from inventory for their Custom System that you only put together for them, for this one time need.

Both of these process will remove the inventory components from Inventory.

Or, Group item = you offer a necklace with various pendants = make different Group Items, to sell me "3 Group name = pink pendant on necklace" and "4 Group name = green pendant, on same necklace."

It eliminates you needing to manually list those details.

"I've done some research and find myself even more confused, thanks in advance for your help!"

Start with some basics:

You cannot list Expense for things still in stock of significantly value. The IRS requires you to Hold the value until the Sale happens. That is called Inventory Asset. You spend money (an asset) on Stuff (an asset). See how you have not actually Spent anything, yet. Next, it matters as to the significance (dollar amounts). You can do Periodic Inventory management. You don't expect a bakery to track every tsp of yeast.


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