Cost-sharing labor

martron · ‎March 17, 2020

I have an LLC that recently won a grant from a state agency to do consulting work. To win the grant, I had to commit to a 50% cosh-share. In other words, for every hour that I bill, I have work another hour at no cost to the state. Furthermore, when I send invoices to the agency, I have to submit both sets of hours and details on which specific tasks the time was spent.

I've been entering my hours by individual activity record the labor as one of two service items: one called cost-share and one called long term hourly rate. Both have the same "price" which is my hourly rate. That way I can track the totals to prove that I'm within the agreed to contract parameters.

The question is: how should I account for the cost-share? Should it be a credit against each invoice? Should it be a writeoff? Is there something else I should be doing altogether?

MJoy_D · ‎March 18, 2020

Hello, @martron.

In QuickBooks Desktop (QBDT), an invoice will help you track how much they owe you (Accounts Receivable).

But, you can still enter the time of the activity that you’ve performed that has no cost. When you enter this activity, you can simply clear the Billable checkbox.

That way, you can track the hours you don't invoice your customer for. However, they’ll still appear on any reports that include this job. See this article for guidance: Customize customer, job, and sales reports in QuickBooks Desktop.

Check this article for more information: Tracking job costs in QuickBooks Desktop.

I'm always here if you need further help. Have a wonderful day!

View solution in original post

Kendra H · ‎March 17, 2020

Hey there, @martron.

Thanks for reaching out to the Community.

Before going into detail, I recommend consulting with your accountant because workflows vary from business to business.

For now, you can refer back to this article with tracking job costs in QuickBooks Desktop: Tracking job costs in QuickBooks Desktop.

If you have any more questions or concerns, please don't hesitate to comment below. Have a good rest of your day!

martron · ‎March 18, 2020

Thanks for getting back to me so quickly, but that didn't help. Maybe if I present this in a different situation, if I work 20 hours for a customer and only get paid for 10, how would I account for the unpaid 10 hours?

MJoy_D · ‎March 18, 2020

Hello, @martron.

In QuickBooks Desktop (QBDT), an invoice will help you track how much they owe you (Accounts Receivable).

But, you can still enter the time of the activity that you’ve performed that has no cost. When you enter this activity, you can simply clear the Billable checkbox.

That way, you can track the hours you don't invoice your customer for. However, they’ll still appear on any reports that include this job. See this article for guidance: Customize customer, job, and sales reports in QuickBooks Desktop.

Check this article for more information: Tracking job costs in QuickBooks Desktop.

I'm always here if you need further help. Have a wonderful day!

martron · ‎March 18, 2020

Great idea! Thanks.

Teri · ‎June 12, 2020

@MJoy_D said:

"But, you can still enter the time of the activity that you’ve performed that has no cost. When you enter this activity, you can simply clear the Billable checkbox."

@martron For cost-sharing on a Grant, you do have cost and usually have to show that on your invoices to them so I usually setup a separate labor account:

5000 Direct Labor

5050 Direct Labor - Cost Share

So you can keep separated for billing.

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Cost-sharing labor