OpenPro Application Guide - Job Cost (JC) and Project Management
[[:products:financial|Back]]
=====Job Cost and Project Management Application Guide=====
====Chapter 1 Understanding Job Cost====
===Introduction===
This chapter defines keywords and concepts used in this guide, describes the product, diagrams the information flow within the system, and identifies the major enhancements from earlier versions of OpenPro.com Job Cost.
===Keywords and concepts===
Major concepts in Job Cost are identified in alphabetical sequence below.
**Accounting**\\
Accounting is the methodical collection, categorization, and organized presentation of financial records.
**Alphanumeric**\\
When the guide refers to , it means letters of the alphabet, numerals (numbers), special symbols (*,&,$,etc.) or any combination of all three kinds. In contrast, (or ), means only numbers.
**Burden**\\
Expense incurred for a job beyond the cost of wages and materials. There are two kinds, labor burden and overhead burden.
**Category**\\
See cost category.
**Company Information**\\
Company information is a collective term for the choices you make about how you will customize OpenPro.com software to your business applications. These decisions relate to all your OpenPro.com modules, and control such matters as the format of your screen display. They are made when the system is installed and seldom changed thereafter.
**Control Information**\\
To customize OpenPro.com J/C to the needs of your business you must make choices that are collectively called Control information. These decisions relate to all applications in the module, such as whether or not you access inactive files. They are made when the system is installed and seldom changed thereafter. Control Information differs from Company Information. The former controls matters specific to the J/C module. The latter controls matters common to all OpenPro.com modules.
**Cost Category**\\
A is an aspect of a job or group of jobs for which money might be spent. Cost categories define in a fairly detailed way the types of work or costs that can go into one or more of your jobs. Examples of cost categories are: rough carpentry, plumbing, heating, air conditioning, etc. Cost categories are more detailed than cost types, and can be broken down into even more detailed categories if desired, until a very fine level of detail is reached.
**Cost Item**\\
A is a cost category assigned to a specific job. The difference between a cost item and a cost category is that a cost item has been connected to a specific job and assigned a dollar amount. A full list of the cost items in a job is equivalent to a complete description of the work and costs that make up the job. (Example: The cost category is budgeted for the Smiths’ house to be $3,500. Therefore, is listed as a cost item under the job for the Smiths’ house.)
**Cost Type**\\
A is the broad classification of types of costs that go into all of your jobs. Cost types are not very specific and do not describe the costs in any detail. Examples are: labor, materials, subcontract fees, overhead, administrative expenses, etc. A more detailed breakdown of types of costs is provided by the cost categories.
**Data Organization**\\
Most of the information you enter into your computer is stored on disk. In order for computer programs to locate specific pieces of data (within large masses of data), data must be organized in some predictable way. OpenPro.com accounting software organizes your data for you automatically as it stores it on your disk.
The following are terms that are associated with the structure of data:
//Character//\\
A character is any letter, number or other symbol you can type on your keyboard.
//Data File//\\
A data file is a group of one or more related records. A data file is often referred to simply as a file. The Cost Category file in Job Cost is an example of a data file. Such a file is made up of several records, each of which contains the category number, description, etc. for one cost category.
Each file is kept separate from other files on the disk.
There are other types of files in addition to data files. Programs are stored on the disk as program files. However, references to files in this user guide mean data files unless specifically stated otherwise.
**Entry**\\
A record in a data file is often referred to as an entry.
**Field**\\
A field is one or more characters representing a single piece of data. For example, a name, a date and a dollar amount are all fields.
**Record**\\
A record is a group of one or more related fields. For example, the fields representing a customer’s name, address and account balance might be grouped together into a record called the customer record.
**Debit and Credits**\\
In addition to handling a particular area of accounting, as described above (such as accounts receivable or accounts payable), each OpenPro.com package also keeps track of the effect of those transactions on G/L. For example, when you bill customers for jobs or receive payment from your customers, this activity affects not only J/C, but also G/L.
These transactions must be recorded both in the job and in G/L under the proper G/L account numbers.
The terms and refer to the types of transactions that must be recorded in G/L accounts to accurately reflect the activity occurring in all accounting areas. (See the Glossary in the Installation and System Guide for exact definitions of these terms.)
In J/C, a debit memo issued by you to a customer increases what that customer owes you, and a credit memo decreases what is owed. Unfortunately, debit doesn’t always mean and credit doesn’t always mean . In some accounting areas, a debit increases a G/L account and a credit decreases a G/L account. In other areas, a debit decreases, and a credit increases, a G/L account.
This occurs because of the system called (also called ) which is the standard method of accounting used today.
**Double–entry accounting**\\
The concept behind double entry accounting is that every entry (transaction) results in balancing debit and credit entries into the General Ledger.
Let’s look at the debits and credits involved when a typical independent business pays for goods or services bought earlier on credit:
* **The debit:** The disbursement (payment you make) results in a debit transaction that decreases your account (usually called the account). This is a .
* **The credit:** The payment also causes a credit transaction that decreases one of your accounts. This is a .
So two entries are made into G/L that balance each other. These balancing entries form the basis of double entry accounting. If you or your accountant ever find your G/L accounts , it means that the proper balancing entries were not made.
No attempt is going to be made in this guide to teach you all about accounting, especially about what types of transactions cause what accounts to be debited or credited. Unless you’re an accountant or fully responsible for maintaining your company’s general ledger, don’t worry if you don’t remember whether a debit increases or decreases a particular type of G/L account.
When using OpenPro.com accounting software, you will occasionally be asked to enter the G/L account to be debited or credited. Just refer to the appropriate chapter in this User Guide, where you’ll find exact instructions about what to enter.
Within OpenPro.com General Ledger, Accounts Receivable, Accounts Payable, Payroll, Order Entry/Billing, Job Cost, Inventory Control, Purchase Order, and Check Reconciliation, the software automatically takes care of all double entry accounting as you enter the required information on the screen.
**Function**\\
As used here, means one or more programs that accomplish a specific task.
Each selection on a menu of an OpenPro.com package is a function. When you select a function from a menu, one or more programs automatically execute, thereby allowing you to accomplish the task you selected. In fact, selection is often used interchangeably for function.
**General Ledger**\\
is the area of accounting where all accounting records are brought together to be classified and summarized. Financial statements are printed based on this data.
As used here, means . General ledger is often abbreviated or .
means a book where accounting records are kept. This term evolved from pre–computer times when accounting records were kept exclusively by hand in large books called .
**General Ledger Account**\\
A is a specific category under which all financial activity of a certain kind is classified. For example, you might have a general ledger account called for telephone bills.
Accountants are experts at defining the various G/L accounts (financial activity categories) needed by a business. Part of this definition process involves assigning an to each G/L account.
Typically, an independent business will have a hundred or more G/L accounts. In OpenPro.com accounting packages, each time any financial activity occurs in any area of accounting, the dollar amount of the activity is recorded under the appropriate G/L account numbers.
You may wish to divide your account number into a main account and a subaccount. You may also wish to incorporate a cost center into your account number structure. A cost center is a part of your company (for instance, a department or a regional office) for which sales and/or expenses (and sometimes profits) can be calculated separately from the total sales and expenses of the whole company.
The Company Information chapter provides detailed information on the format of the account number. To alter an existing format, refer to the Reformat Account Number chapter of the Information and System Guide.
**Help**\\
You can press the on the upper right side of the screen key at any time for on–line help about a task or selection you are currently using.
**Integrated**\\
When a set of computer packages is integrated, any information generated in one package that is needed in another package is automatically supplied to that other package. You don’t have to enter it twice.
OpenPro.com accounting software is fully integrated. When J/C is used with other OpenPro.com packages, any data recorded in those other packages that J/C should know about is automatically made available to J/C.
**Job Cost Accounting**\\
is the area of accounting dealing with costs and revenues accumulated and accounted for on an individual job basis. It is often abbreviated as .
As used here, means . A job generally lasts for weeks or months and is individually customized to the client’s specification. Jobs are also often referred to as .
Jobs can be run using the method of accounting in which profit is recognized only when a job is completed (or when it is substantially completed). Alternatively, jobs can be run using the method of accounting in which profit is recognized each period as the job progresses.
**Multi–Company**\\
refers to the capability to do accounting functions for multiple companies with the same set of packages. A user wanting to do accounting functions for more than one company on OpenPro.com packages can select the option.
**Period**\\
A period is a regular interval of time that you use for evaluating your operation and comparing current information to historical data. At the expiration of a period, standardized reports are usually printed and running totals are reset to zero. This is called closing the period.
You define the length of your periods, which may (but need not) correspond to the accounting periods you use in your General Ledger system. Regardless of your choice, each period remains open until you explicitly close it. For illustrative purposes this guide assumes that you use monthly periods.
**Post**\\
To means to take transactions from a temporary file and move them to a permanent file (where other transactions probably already exist). Often, during transaction posting, information in other data files is also updated. For example, in J/C, costs are initially entered into a temporary transaction file. After costs have been entered and verified as correct, they are posted to the permanent files.
**Recognized Profit**\\
That portion of the overall profit of a job which you currently recognize as having been , whether or not you have yet been paid for it. This is a concept that applies only if you use the method of accounting.
**Screen**\\
A screen is the image you see on your computer monitor. Each screen in the system has a standard format, and each is discussed and (with trivial exceptions) illustrated in this guide.
The two main types of screens are:
* **Menus**. These allow you to choose which application you wish to execute.
* **Data–entry screens**. These allow you to enter new data into the system, or to change existing data.
OpenPro.com screens are interactive; that is, they respond to each item of data as you enter it, without waiting for you to enter the entire screen.
**Selection**\\
Selection is the name given to the choice which you make from the options available on a menu. Making this selection will either lead you directly into the desired application, or it will bring up a submenu requiring you to narrow your selection further. In this guide, all references to selections are spelled exactly as they appear on the screen, but are printed in italics.
**Spool**\\
SPOOL is an acronym meaning . Spooling is a technique that allows a report to be printed at a later time. Instead of reports going directly to a printer, they are saved as a disk file (which is usually a lot faster). When a printer is available, all or some saved reports can be printed in one long run (for example, overnight).
**Transaction**\\
As used in accounting, means a business event involving money and goods or services. For example, a transaction occurs each time you gas up your car: you pay money in exchange for gasoline (goods).
Because computer software deals primarily with business events that have already taken place, in OpenPro.com software, means the record of a completed business event involving money and goods or services.
The records of sales made and payments received are examples of transactions from the area of accounting called . The records of your purchases and the payments you make for such purchases are transactions from the accounting area called . The records of quantities of goods received or sold are transactions from the area of accounting called .
**View**\\
To information is to examine it on a screen. This is a rapid alternative to obtaining a printed report. View screens are designed to display information more compactly than data–entry screens, but without permitting the information to be modified.
**Product Description**\\
OpenPro.com Job Cost allows you to accurately track costs incurred for jobs. It provides reports to tabulate and examine these costs, compare them with budgeted or estimated costs, and track the progress of jobs. It also tracks job billings and payments, and tracks progress in terms of percentage completed and cost remaining to complete.
J/C works with other OpenPro.com accounting packages in these ways:
* Costs for materials, subcontractors, and supplies can be entered in Accounts Payable and automatically transferred to the right jobs in J/C.
* Wage costs for laborers can be entered in Payroll and automatically transferred to the right jobs.
* Materials stored in inventory and not yet allocated to any job can be transferred to the appropriate jobs from Inventory Control.
* Billings to and payments from customers can be entered in Accounts Receivable and automatically transferred to the right jobs.
* Quotations in Order Entry can be applied to the right jobs.
General journal entries from General Ledger can be transferred to the appropriate jobs. These include distribution of payroll taxes and workers’ compensation insurance premiums to jobs, posting of recognized profit to jobs, and adjustments because of previous entry errors.
You can run J/C without having OpenPro.com Accounts Payable, Inventory Control, Payroll, or Accounts Receivable. In this case, you enter costs and billings directly in J/C. You can then transfer these cost and billing amounts to the appropriate accounts in the General Ledger.
If you add J/C to a system that currently contains A/R, A/P, I/C, PR, or G/L, you should interface J/C to them. This is done through the Job Cost package.
You can also run Job Cost independent of any other OpenPro.com package.
J/C is appropriate for a wide range of companies that are in the business of doing jobs for customers. Using options and choices selected in the Control file when the package is initially set up, you can tailor J/C to your business.
The OpenPro.com Job Cost system is suitable for a small to medium size construction company, a general contractor, or a subcontractor. It is also suitable for job shops such as print shops, light manufacturing, advertising agencies, scientific laboratories, interior decorators, etc. It is not particularly suitable for large–scale manufacturing companies with crews working at fixed work stations or assembly lines, but it can be tailored for use in small–scale manufacturing companies.
The OpenPro.com Job Cost package includes these features:
* New or in–progress jobs can be easily entered and edited.
* Labor costs, material costs, subcontract costs, profit, and up to five user–defined cost types are tracked for management.
* Cost categories are user–defined.
* Budgets for all detailed costs can be entered. Jobs cannot be activated unless estimates are equal to the job price.
* Budgets are tracked against actual costs incurred.
* Completion estimates can be entered for individual parts of jobs. A function is available which will generate completion estimate entries for all cost items for a job, as well as an entry for the entire job.
* Detailed on–line inquiry is provided.
* Completed jobs can be saved for viewing or later restoration to an active status.
* Information for a new job can be quickly created by copying all or part of another job.
* Numerous reports such as Job Status Report, Job Performance Report, Job Profitability Report, and Cost Category Analysis Report can be printed.
* Job Cost can be used independently or interfaced with OpenPro.com Accounts Receivable, Accounts Payable, Order Entry, General Ledger, Payroll, Inventory Control, Purchase Order, Intelligent Query and IQ Access, and Report Writer.
* Includes password protection and extensive data file integrity–check and backup/restore facilities.
* Allows you to use either a multi–level menu or a