How To Reduce Estimated Costs

Hello there, @skoz5555.

Thank you for dropping by here in the Community. I'll be happy to help you reduce your estimate in QuickBooks Desktop. 

You need to edit the Estimates created for the project to reduce the estimated costs. I can walk you through editing an existing estimate. 

Find the transaction you want to edit and change the information that needs to be updated. Let me show you how:

1. Go to the Customers menu and select Customer Center.
2. Select the customer on the estimate you want to edit.
3. On the right side portion of the screen, click the Transaction tab.
4. In the Show drop-down, select Estimates.
5. Look for the estimate you want to edit and double-click to open it.
6. Update the details on the transaction.
7. Hit Save & Close.

For more information about this type of transaction, refer to this article: Create an estimate.

In addition, you can also customize this report to show other columns and information you wish to include in the report. Check out this article to learn more: Customize reports in QuickBooks Desktop. 

If you have any other questions about QuickBooks reports, be sure to let me know as I'm always here to help.

In hindsight you could have edited or copied the original estimate with each incremental change order added and at this point you would adjust the original estimate by reduction of cost, scope or materials.

Estimates themselves are non-posting and billing is only made from invoices created from estimates. Each new invoice created from the original or changed Estimate reduces the remaining amount of the project to be billed. If a project is 100k, increases to 150k and 75k has been invoiced the remaining project is 75k. If you edit thecestimate down by 15k the remaining un-invoiced amount is 60k

The issue lies in the accounting period.  The project started out at 350k as a base contract and the first Estimate in QB.  Each month, changes would be collected and entered as one Estimate in QB for that particular month.  Now it's August, I have a Base estimate in January and then additional Estimates (Change Orders) for each month and we're up to 420k.  The client had decided to cut items out of the scope of the work, approx 50k.  Not the changes they made, but things that were in the original scope and haven't been started yet. 

The change orders are already signed and approved, so I can't go back and change those;  however, even if I did, that month is already closed and it would throw off my WIP report.  Essentially, I need to find a way to reduce the Estimated Costs in the Job Cost reports moving forward.

I realize what I want to do, which is create a negative estimate, is not possible.  I appreciate any brainstorming or "work arounds" that might accomplish this.

I believe I found a solution for this, but wanted to throw it out here to see if anyone sees something I don't.  To refresh, I have a client that is removing a lot of items from their project, which requires a negative change order.  The changes have to occur in the same period as made.

I've created an Other Charge account titled "Reduction Offset".  I enter all the negative transactions, which equal approx -61,000.  I then balance the estimate with an offset of 61,000 into the "Reduction Offset".  Seeing as the Estimate is non-posting, it shouldn't matter what goes on it, as long as my categories add up on the Job Cost report (I hide the Reduction Offset Item).

Anybody see any issues with my plan?

You can continue using your solution to reduce estimates costs from the project, skoz5555.

Yes, estimates are non-posting transactions, and they won't affect your accounting reports. You can make changes to your estimates as long as you haven't created an invoice from them.

In case there are invoices created from the estimate, you need to delete those invoices, then edit the estimate. After making changes to the estimate, you can create a new invoice.

Progress invoicing helps keep your project organized. To ensure that transactions are recorded correctly, you can use this link to help you with the process: Set up and send progress invoices in QuickBooks Desktop.

Let me know if there are other things you need by commenting below, I'll be right here to help manage your transactions in QuickBooks.

What a great idea, but it still shows up in my Work in Progress.. Estimate VS Actual report.

Have you figured a way around this?  

I hope QB finds another solution, besides changing original estimate.  We close our books monthly and can't change things after they are closed.

Any more information would be appreciated.

Thank you for taking the time to express your concerns in the Community, @Deryl. I'll help you send feedback so you can resolve your concern with QuickBooks Desktop.

To enhance your experience, I recommend sending feedback to our product developers for this function in QuickBooks Desktop.

To do so, follow these steps:

1. Select the Help form the menu.

2. Choose Send Feedback Online.

3. Select Product Suggestion from the drop-down menu.

4. Fill in the following details and hit Submit button.

I'm also adding a guide that covers all available reports can be accessed through the QuickBooks Reports menu: Understand reports.

Please return and let us know if you require any additional support. The community is working for you. Have a wonderful day.