Job Cost Accounting

Let me share with you some insights about the differences between class tracking and product/service features. 

In QuickBooks, you can create classes that you assign to transactions. This lets you track account balances by the department, separate properties you own, business office or location, or any other meaningful breakdown of your business. This way, you'll get a clearer insight on your sales, expenses, or profitability by business segment.

On the other hand, using the Product/Service feature helps you track how much you make and spend on each product or service. You can enter these as items so you can quickly add them to sales forms. Using this will give you more detailed financial reports and helps you complete transactions faster.

If you aren't sure what features are you going to use, I'd recommend reaching out to your accountant. They are the ones who can provide strategic insights to your businesses.

You can also check out our class tracking overview to learn if it’s the right tool for you and how to get started.

I've also included these articles that you can use as an additional reference in managing your transactions in QuickBooks Online:

• How to set up product and service items you buy and sell, but don't track as part of your inventory.
• Learn how QuickBooks handles your inventory accounting.
• How to organize your customer and vendor transactions by class.

Let me know if you need further assistance with this. I'm always around to provide answers and clarifications to your questions. Have a great day ahead and take care.

@appletreeconstru 

As another option, consider having a construction management app to let you get a better insight of your operation. It will integrate with QBO and TSheets/QB Time.

One of the things about this that I find confusing is that Products/Services are assigned to "item categories"- whereas I need to assign items that are in categories to Products/Services.  Does QBO use the term "category" to refer to two separate types of data structures- 1) Categories and 2) Item Categories, or are these the same?

For example, I have Categories such as "Cost of Goods Sold" or "Software Expenses", etc., basic stuff.

But, what I need to do here is assign some items within "Cost of Goods Sold: Job Materials" to Product/Service "Framing", some to "Trim", etc. 

Hello, appletreeconstru.  

Thank you for reaching back to us. Let me share some insight about what categories is in products and services. In QuickBooks Online, categories are used to classify products and services (usually represented by items) your company sells to customers. It allows you to create and edit categories that sync with your QuickBooks Online account. 

For more information on using Item Categories within QuickBooks Online, please refer to their help center article Introduction to Categories in Products and Services.   

If there's anything else that I can help you with, please let me know in the comment section down below. I'll be always around ready to help.

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@AileneA wrote:

Hello, appletreeconstru.  

 

Thank you for reaching back to us. Let me share some insight about what categories is in products and services. In QuickBooks Online, categories are used to classify products and services (usually represented by items) your company sells to customers. It allows you to create and edit categories that sync with your QuickBooks Online account. 

 

I understand.  It's just odd to me that QBO uses the term categories to refer to different things in different places.  For example, if I create an Expense, the Table "category details" and the ensuing column "categories" is referring to an entirely different list than the one used to organize Products/Services. 

I'm leaning towards using classes to do the type of Job Costing I need to do, but not sure how to make the class of an expense appear on an invoice so a customer could see it.  Surely this is possible? 

Also, is there an easy way to bundle items on an invoice by either class or payee?

Hello there, appletreeconstru.

You can turn on the Billable expense feature in the settings within your QuickBooks Online account. This way, you can add the class from an expense and carry it over to an invoice. To start, bill a customer an expense, including class. Here's how:

1. Go to the +New button.
2. Select Expense under Vendor.
3. Select the payee.
4. In the Category column, select the expense account for the transaction.
5. Enter the description and amount of the expense, then select the Billable checkbox.
6. In the Customer column, select the customer you want to bill for this expense.
7. Once done, hit Save and close.

Let's then proceed with adding the billable expense to an invoice:

1. Still, in the +New button, select Invoice.
2. In the Customer ▼ drop-down menu, select the customer you created a billable expense for. This opens the Add to invoice window.
3. Select Add on the billable expense.
4. Then, click Save and close.

Also, the option to bundle the items by class or payee on an invoice is unavailable. Instead, you can add the items individually to the transaction since this is already recorded in your QuickBooks account. You can easily add it without re-entering the items. I can see how beneficial and time-saving it is. You may want to visit our blog website. This way you'll be updated with the latest news and product improvements. 

You may want to check these links to gather additional details about handling items and classes:

• Product and Service items
• Manage classes in QuickBooks Online.
• Track your transactions by class.

Please visit again if you have other concerns with QuickBooks. The Community is always here to help. Stay safe and be well.

how do you add departments in QuickBooks desktop?  these instruction are for QBO which is different than the desktop.  we have several states that we do work  and want to track by state, but also by job and by class.

Thanks for joining this thread, Icmech5572.
 

The steps mentioned in ReymondO's post are for creating departments by classes in QuickBooks Online. As his post mentions, with classes, you can track account balances by department, separate properties you own, business office/location, or any other meaningful ways of tracking your information.
 

The class tracking feature is available in QuickBooks Desktop as well.
 

Here's how to turn it on:
 

1. Open your company file.
2. In the top menu bar, go to Edit, then Preferences.
3. Access your Accounting screen.
4. Open the Company Preferences tab.
5. Tick your Use class tracking for transactions checkbox.
6. If you want a reminder when you haven't assigned a class, turn on the Prompt to assign classes checkbox.
7. Select OK.

After activating class tracking, you can set up categories for expenses and accounts. You'll want to use classes for one category only. For example, if you're using classes for department, don't use them for store locations.
 

Please feel welcome to send a reply if there's any additional questions. Have an awesome Tuesday!