Recoveries

In this article we look at how direct and indirect costs such as labour and resources can be recovered on a job. We also look at the journal entries that are created.

Before proceeding with this article we recommend that you,

• Have discussed your requirements with your Accountant,

• Have a clear understanding of the costs to be recovered and on what basis, and

• Have an understanding of the Job Costing module in Jiwa 7

Overview

Recoveries are a way in which direct and indirect costs can be recovered through a job or project.  These can include expenses such as;

• Direct labour,

• Indirect labour, and

• Resources costs such as equipment

Before you start adding recoveries to your jobs we recommend that you discuss your requirements with your Accountant in particular the following points as these will have an impact on how the Job Costing module is setup;

1. What costs need to be recovered,

2. How is your recovery rate calculated,

3. What staff records need to be setup in Job Costing for recovery

4. What resource records need to be setup in Job Costing for recovery, and

5. How are recoveries to appear in the P&L

Staff

To record labour against a job each staff member must be setup as a staff record in the Job Costing module.

Staff are maintained through Job Costing | Configuration | Staff

The labour recovery account is setup against each staff record, this allows you to post to multiple labour recovery accounts if required.

Resources

To recover resource costs against a job each resource must be setup in the Job Costing module.

Resources are maintained through Job Costing | Configuration | Resources

The resource recovery account is setup against each resource record, this allows you to post to multiple resource recovery accounts if required.

Adding Costs to Jobs

Recoverable labour and resource costs can be added to a job through the following forms;

• Job Cost Entry, and

• Timesheets

When recoverable costs are added to a job and the form is activated a journal entry is created to move the recovery out of the recovery account and into WIP.

The following journal entry is created.

Invoicing Costs

When recoverable labour and resource costs are invoiced the costs are moved out of WIP and into Cost of Sales

This video is best seen on the full screen. Just click on the icon at the bottom right of the video (see image below).

To exit full screen just press escape