When closing a job, how do we specify the distribution of the job in the GL? Currently, all costs are held in the Work in Progress account. Do we manually create entries in the GL to move the costs out of WIP into different Asset accounts or do we make the allocation through the Job Cost Module when we close the job?

We are fairly new to Job Cost and this will be our first time closing a job.

Thank you!

Hi Michael,

If there is outstanding WIP for a job when it is closed in JobCost, GL transactions will automatically be allocated - the WIP account is credited and the appropriate Cost account is debited (as set up on the Job, Phase and/or Category) . There is also a Job Close audit report that lists the GL activity due to closing a job.

The revenue recognition method assigned to the job may have an effect on the amounts, especially if the method is by Completed Contract - which means all revenue and costs are determined only when the job is closed.

If you wanted to see this in action before doing it 'live', you could try the process in sample data and close job number 4. Or try it on a copy of your company data to see if you are satisfied with the numbers.

If this still feels a little daunting, you could also contact your Adagio consultant for assistance.

Hi Michael

Can you have your Adagio consultant contact me. Your question has to do with how costs move out of WIP, but the more interesting question is how you recognize revenue throughout the course of a job. JobCost is my forte and based on the answer to the more interesting question, I would like to discuss options with him or her that might simplify the accounting a whole lot.

Steve Schwartz
steve@sschwartzcpa.com

I spoke with the client. The job was set up properly to track costs at the phase/category level, but the WIP and Cost of Sales accounts at the category level were both pointing to the WIP account. So when the job was closed, the debit and credit went to the same account.

I explained that the Cost of Sales account is where the debit goes (by category) when the job is closed.

They had improperly set up the Revenue Recognition method of the job as Billings and Costs instead of Completed Contract, but since they never used the Recognize Revenue and Expense function, the net effect was that the job was essentially set up as a Completed Contract job. So there was no harm done by this mistake.

Steve