Job Reports to show Labor Expenses

Ashley65 · ‎September 19, 2018

Hello,

I'm using QBD Pro+ 2018. I have very recently converted over from Sage and just finished setting up TSheets integration. That provides the weekly timesheet information for us. We outsource payroll processing. I have tried and tried and cannot find out how to get the Job Profitability report and the P&L by Job reports (or anything else) to show how much labor was spent on a job. Although we don't bill the customer for labor, it is a huge part of our estimating process and we need to know how much time is actually spent on each job. It took zero set up to see this in Sage and I view it as a very basic report/feature so I'm really surprised it doesn't just pop up normally unless I'm missing a checkbox or filter somewhere.

I do have "Track Expenses by Job" and "Job Costing and Item tracking for paycheck expenses" selected. I have not turned on class tracking, as the help guide says it is generally for multiple locations and such. We only have shop labor and office labor, which each have their own accounts and payroll items.

Whenever I try to add a payroll item filter to a job report, it doesn't show any payroll information and even clears out everything else on the report like income and expenses.

On one of the guides, there's a note: "Time sheets are a non-posting entry. Time must be imported to a bill or invoice to be included in the Job Profitability or Company Financial Reports." I'm hoping this doesn't mean I need to purchase payroll. As I've said, it is already outsourced and we are locked into a contract. It should not be required just to get accurate job reports. Maybe I misunderstand what it means.

On a side note, is selecting a service item on each line in the Weekly Timesheets required for my situation? And is there a way to set that up to autofill automatically between QB and TSheets depending on the job/customer if so? It seems like an unnecessary step for us as everyone is either shop labor or office labor, and those are already 2 payroll items tied to 2 accounts.

So, thanks for reading. I realize there are tons of guides and posts about this, but I still can't find a fix.

VivienJ · ‎October 16, 2018

Hello Ashley65,

I hope you’re both doing well! I’ve thoroughly read this thread and followed the conversation you had with ClayJ.

It’s good you’ve found the Class tracking feature in QuickBooks Desktop useful. ClayJ has provided accurate details on how you can use it specifically to your situation. Let me add some information as well.

You’re right! In order for the labor costs per job to show on the Job Profitability report, you need to manually enter paychecks for the employees. There isn’t a need to purchase a payroll subscription for this; you can simply activate the Manual Payroll functionality.

Then, you’d have to create the paychecks against the timesheets entered in the program. However, you’ll have to manually enter the taxes taken out from the employees’ pay.

To activate the Manual Payroll functionality:

From the Edit menu, choose Preferences.
On the left pane, choose Payroll & Employees then go to the Company Preferences tab.
In the QuickBooks Desktop Payroll Features section, select the Full Payroll radio button.
Click OK.

To set it up:

Go to the Help menu, then QuickBooks Help (or F1 on your keyboard).
In the Help Search field, type manual payroll then press Enter.
Select the topic Process payroll manually (without a subscription to QuickBooks Payroll).
Under Set your company files to use the manual payroll calculations setting, click the manual payroll calculations link.
Select Set my company file to use manual calculations link, then Ok.
Close and reopen QuickBooks.

To record the paychecks:

Click Employees at the top menu bar, then select Pay Employee.
Make sure that the Pay Period Ends and Check Date are correct.
Select the name of the employee, click the Open Paycheck Details link.
In the Employee Summary section, enter the taxes taken out from the paycheck.
From the Company Summary, type in the taxes contributed by the company.
Click Save and Close, then Continue.

If there are already existing checks created for the corresponding paychecks, you have to delete them to avoid double entries. Here’s how:

Go to Lists, then Chart of Accounts.
Open the Bank account you’ve deposited the checks to.
From the register, open the check one at a time, and then press Ctrl+D to delete them.
Click Save and Close.

I’ve added screenshots as visual reference.

Once done, open the Job Profitability report and you should be able to see the labor cost per job.

Don’t hesitate to update this thread on how things go. I’ll be around!

View solution in original post

ClayJ · ‎September 21, 2018

Hello, @Ashley65.

Welcome, and thank you for stopping by the Community. I've read over your post, and I have just the thing to help you with tracking labor per job. In order for data to show properly under a Job Profitability report or a P&L by Job, you would need to make labor a billable expense and assign it to a client. However, there is a way around this with class tracking.

Class tracking allows you to assign an additional layer of data to whole transactions, or individual line items. With this, you can assign classes to transactions for tracking who and how much work was done per job.

In order for class tracking to function properly in this manner, your payroll data will need to be within your company file. This doesn't mean you need a payroll subscription with us, just simply something showing the breakdown of the checks per employee. With that data in your file, you can then add the classes.

It is a feature that needs to be turned on through the company preferences. Here's how:

Choose Edit > Preferences.
In the Preferences window, click Accounting in the list on the left.
Click the Company Preferences tab.
In the Class section, select the Use class tracking for transactions checkbox.
Click OK to save changes.

Now pull up an invoice or some other transaction, and you will now see a class field. By default, this will only be visible to your company and will not print on the transaction. Should you decide to implement this, you will be able to use the P&L by Class report for tracking labor.

Let me know if you have any questions about this or anything else QuickBooks. I'll be here in the Community if you need me.

Ashley65 · ‎September 24, 2018

Hi, thank you for the response!

Now that I've turned on Class tracking it seems like each line in Weekly Timesheet entry will need to be tied to a class, is that correct? (hopefully I can set that up automatically through tsheets like we can map items). So everything has to have Service and Payroll items and also a class item if I want it to show up on a job report?

When I look at a job report, I can see expenses and income for that job. When I filter to add a Class however, it clears all data.

On a side note or maybe tied to the issue, can you clarify this:

"In order for class tracking to function properly in this manner, your payroll data will need to be within your company file. ...just simply something showing the breakdown of the checks per employee."

The only process I know of is recording the processing fee from our payroll company, completing a journal entry to record the weekly transaction, and to record the transfer from the regular checking account to the payroll checking account. I haven't seen a way to expand that further. I assume I need to take an additional step to actually get QB to determine labor costs.

Thank you again.

ClayJ · ‎September 25, 2018

Hey again, @Ashley65.

Thank you for getting back to me. I'm happy to clarify further on my previous post.

"In order for class tracking to function properly in this manner, your payroll data will need to be within your company file. ...just simply something showing the breakdown of the checks per employee."

What I mean by this is a breakdown of the payroll checks (e.g. payee, tax allocation, etc...) from the third party program will need to show in QuickBooks; whether that be as a check or a journal entry. Some payroll companies can provide a file to you that has this information, so you can have a full and accurate record of your employees' payroll with the rest of your data.

In this situation, I recommend reaching out to your payroll provider to see if they can give you a file with your payroll history. With this info in your company file, you can then apply classes to pull the data for your reports.

I hope this information helps dispell any questions. Should you have anything else you'd like to go over with me about this or anything else QuickBooks, don't hesitate to leave me a comment down below.

Ashley65 · ‎October 12, 2018

Hello again and thanks for your response,

I am able to see labor costs (regardless if Class is turned on or off because it seems to show labor accounts on the P&L by Class), however I still can't see labor costs per job, and that's still my goal. My guess is that I would need to enter a payment for each employee (making the journal entry route impossible because you can't tie anything to a job there), and separate the payments per job instead of a straight total. And each line - each job - would have a class tied to it if that's necessary. I'll explain why this is a problem.

As an example, we have about 20 active jobs at any given time. Direct labor for those jobs need to show up on job reports (as it's CoGS just like job materials). We have an employee who assists in the shop but also oversees jobs in progress. He works on about 5 different projects/jobs a day. One weekly timecard looks like the screenshot, and that's only half of it. Tsheets generates about 14 lines a week for the 5 employees that work Direct Labor.

I see that your response does say that payroll checks need to be broken down - I assumed this just meant gross wages and tax allocation. Our 3rd party does that, but it wouldn't break things down per job - just by direct labor, indirect labor, holiday, etc.

So if I were to need labor costs to show up on a job report, my guess is I would need to manually enter paychecks per employee, separate hours/pay per job, enter each job on separate lines, and go about it that way. That's a ton of work. Probably a total of 85 lines of broken down labor per week. Not to mention tax allocations, the payment to the 3rd party, and the record of them paying taxes for us.

Furthermore, I was planning on having the shop employees select a Class when they switch between jobs - so one job would have a class for creating shop drawings, cutting materials, assembly, counter tops, installing, etc so that we can improve our estimating process. If I were to do that, I might have to break it down even more on the payment entry window so that the job report can differentiate how much time/money was spent on each step of the fabrication process. If that happens, if I have more than just one class set up, that increases my 14 lines of entry per employee to at least 25 per employee.

1, I hope I'm going about this wrong, but I assume the payment process needs to be tied to jobs for it to show up on job reports. 2, thanks again for your help. 3, would the payroll feature do this automatically and which tiers would? 4, if that's the case how on earth is it fair for those of us who are outsourcing payroll having to double pay for this process to work?

Thanks!

VivienJ · ‎October 16, 2018