Hi Alpha

You left quite a bit out of your question. What method of revenue recognition are you using? What version of JobCost are you using? Do you allocated overhead or burden? Are your jobs using the simple tracking method?

Assuming you are using some sort of percentage revenue recognition method, the recognized expenses will almost always be close to the incurred expenses.

They may be off by up to a half-percentage point, because the percentage to apply against the estimates is rounded to the nearest whole number. To take an example, say the total cost estimates are $1,000 and the total incurred costs are $333. The calculated percentage is 33%, which when applied against the $1,000 of cost estimates results in recognized expense of $330, not $333.

The other reason they may be off is if the incurred costs exceed the estimated costs. In this case, the recognized costs will equal the incurred costs. It is a good idea to increase the estimated costs to prevent this from happening.

Steve