QuickBooks offers a lot of great reporting functionality. The job profitability summary provides gross margin dollars and gross margin percentages on jobs and projects on a regular basis. This report is good for contractors, service providers and others whose work is based on projects.
The report gives you a snapshot of your jobs so that you can see which ones are profitable in terms of job costs related to the invoices, but there is a bonus to using this report. It allows you to perform the following three quality checks:
1. Improved Recording Accuracy. Many companies have complex distribution, such as when a company places an order from one location but the product is distributed to a different location. This type of purchase creates a one-sided entry for both accounts in QuickBooks. The Job Profitability Report helps you find these errors and correct the posting so that you have an accurate picture of the profit and loss margin for this sale.
2. Catch Duplicate Billings from Vendors. Occasionally, you will find that a vendor has double billed for a product. In reviewing the Job Profitability Report, you will see if you have been accidentally double billed for a product from the vendor.
3. Apply Bulk Purchases to Clients. Many companies purchase items in bulk for better pricing. When this happens, all of the expense for the items goes against the company and not to the actual customer purchasing the product. If the company is not using an inventory tracking system, they have no way of allocating the cost to an individual sale for cost comparison.
By reviewing the Job Profitability Summary report, you can find such transactions and breakdown the bulk purchase to record these costs correctly. You will be looking for any transactions that have actual revenue without an actual cost offset. Once you find the sales receipt transaction, you can add the customer purchasing information to the Invoice, providing you with accurate numbers once again.
If you need help reconciling your general ledger using the Profitability Summary Report, contact us!