Phone 1-866-278-6243
Free Trial Free Trial Schedule a Demo Schedule a Demo

How do I include EMPLOYEE costs?

How do I include EMPLOYEE costs?

Work Orders 1.X

This is the way you do it:

  1. Create an Item called Labor (Must be an Inventory Part), instead of Asset Account = ?Inventory Asset?, select the expense account that you post your salaries too. E.g. Payroll expense

  2. Include the labor component in bill of materials.

  3. Labor will always be ?out of stock? - so you must force status change (in NC go to Edit --> Preferences --> Work Orders and check ?force status?

  4. When you finish production, the labor cost will be deducted from Payroll expense and included in the cost of your finished product.

  5. You balance sheet and income statement will properly reflect all your costs however your inventory valuation report will show a negative amount for labor [AND WILL ALSO NOT RECONCILE TO THE BALANCE SHEET BECAUSE OF THE NEGATIVE LABOR].   To clear this:

    1. from within QB, go to Vendors-->Inventory Activities-->Adjust Inventory

    2. for account select Payroll expense (the account you used as Asset Account when you created the item)

    3. find the labor item and put 0 for ?New Quantity?

    4. in memo put ?to clear labor from Status Report?

The net effect of this entry will be zero because it?s a debit and credit is going to the same account.

 

6/25/2002



Call Cruncher
More questions?

Call to speak with a NumberCruncher Solutions Consultant at:

call us