About Job-Related Transactions

All job-related transactions in Purchase Orders must reference a particular contract, project, category, and (depending on the item and type of job) resource. Each time you post job-related transactions, Purchase Orders updates the job information and work-in-progress accounts for the job.

When Purchase Orders sends transactions to Project and Job Costing, it updates:

• Committed quantities and committed costs for the job's contract, project, category, and resource (posted with the original P/O).
• Actual quantities and costs in Job Costing (posted with receipts, invoices, returns, credit notes and debit notes).
• Billing information (sent as a billing adjustment transaction). Billing transactions are primarily generated by receipts, but they can also arise from invoices, returns, and credit/debit notes.

Purchase Orders

Any of the following types of changes in a Purchase Order generate transactions for Project and Job Costing:

• Changing quantities.
• Changing an item cost.
• Adding new lines to a Purchase Order.
• Deleting a line or a Purchase Order.
• Changing exchange rates (changes functional currency amount, and so will change amounts in Project and Job Costing).
• Changing taxes (change in cost).

Retainage Accounting

If you use retainage accounting, you can enter a retainage percentage and a retention period on the Retainage tab for receipts, invoices, returns, and credit/debit notes.

Each detail line on a P/O transaction can have different retainage percentages and retention periods.

Note: You must set the retainage accounting option in Accounts Payable to use retainage accounting in Purchase Orders.

Journal Entries for Job-Related Receipts

The usual difference between job-related and non-job-related journal entries is that items received for projects do not go into inventory. Instead, the value of the item goes to a Work-In-Progress account specified for the contract in Project and Job Costing.

For non-inventory items, Purchase Orders provides an option to create general ledger entries during posting in P/O, or later when you post invoices in A/P.

For expensed additional costs, Purchase Orders always creates general ledger entries for job-related documents during posting, although you can generate the entries in Accounts payable for non-job-related receipts.

Posting a job-related receipt for costs or additional costs will produce transactions to update actuals in Project and Job Costing, as will posting adjustments to a job-related receipt to change any of the following:

• Quantity received
• Cost
• Additional cost or amount
• Tax
• Exchange Rate

Note: Purchase Orders does not create entries for expensed taxes for Project and Job Costing.

Additional Cost Lines and Proration

If you add an additional cost to a receipt, you can choose to prorate by cost, weight, or quantity, or you can prorate manually. If you prorate, all items are affected. If you want to assign portions of a cost to different projects or categories, you must enter separate lines for each portion of the cost and prorate manually.

Overhead / Labor calculations

Project and Job Costing calculates labor and overhead costs for items and passes the results back to Purchase Orders. Purchase Orders creates the necessary journal entries.

Overhead is usually calculated on the discounted extended amount.

If you have additional costs (such as shipping costs), you can specify that you don’t want overhead or labor on the additional cost. (If you expense the additional cost, the program lets you specify whether overhead or labor is calculated.)

Job-Related Invoices

If a receipt is invoiced without changes to quantities and costs, and without any additional costs, Job Costing will be unaffected by the invoice.

If an invoice includes an adjustment to the receipt—such as a change to the cost, quantity, or billing rate—Purchase Orders sends transactions to Project and Job Costing. These transactions do not affect the G/L or A/P.

For example:

• If you change the billing rate, Purchase Orders generates a new transaction for the difference between the old billing rate and the new billing rate.
• If you also change quantities, Purchase Orders will also create a billing adjustment transaction for the quantity difference.
• If the receipt originated from a purchase order and you change the quantity outstanding, Purchase Orders will update the committed quantities and costs in Project and Job Costing.

Important! Do not change P/O invoices in Accounts Payable. Job-related invoices transferred to Accounts Payable from Purchase Orders do not update Project and Job Costing when posted in Accounts Payable. Purchase Orders directly updates Project and Job Costing with invoice amounts.

Job-Related Serialized Items or Items Assigned to Lots

You cannot add serialized items or items assigned to lots to job-related requisitions, purchase orders, or receipts.

If you use Serialized Inventory or Lot Tracking, and you use items or serialized items or items assigned to lots in projects, you must order these items with non-job-related purchase orders.

When the serialized or lotted items arrive, receive them into inventory, and then use the Material Usage screen in Project and Job Costing to move them from inventory to jobs.