Dynamics Community Forum Thread Details

T&M Jobs and WIP

Hi all,

I am now trying to get a good understanding of the jobs module.

From what I can tell, it's not very good at handling time and materials jobs, and calculating WIP for those types of jobs.

For example, a classic T&M job would behave like this:

1) Once a job is setup a staff member will put time spent on the job on their timesheet

2) Once it is approved, that time is marked up and appears on the job as billable - let's say $1000

3) That $1000 should be represented as WIP on the balance sheet and it can either be billed or written off at some stage - perhaps at the end of the month or in a few months time

From the WIP methods, I can't see a method that will actually do this - they mostly seem to be based around budgets and amounts billed.

Is there a way to make BC calculate WIP based on Billable (unbilled) time sitting on a job? And relieve WIP when it is either billed or written off somehow?

Thank you.

Hello,

Based on the example you have written, the WIP Method I would use is Sales Value. This way as you incur more expenses and time charges the WIP can increase until you have completed the Job and invoiced the customer for the WIP or you want to write-off the WIP charges. Here is how understand the Method:

The Sales Value method calculates the WIP as the contract value of the price of job usage. Using this method means that the revenue and profit (or loss) of the job will be recognized as the job usage is posted and recognized. The WIP Sales amount is always posted to a liability (unearned revenue) account. If the WIP amount is positive, the WIP amount will be registered in an asset account as

accrued revenue.

The WIP amounts for the Sales Value method are calculated with the following formula:

WIP amount = usage (total price) * contract (total price) ÷ schedule (total Price) - contract (invoiced)

WIP sales amount =

a. contract (invoiced price) if the WIP amount is negative

b. contract (invoiced price) + WIP Amount if the WIP amount is positive

Recognized sales amount = contract (invoiced price) + WIP amount

Accrued sales amount = WIP amount if the WIP amount is positive

WIP cost amount = usage (total cost)

Recognized costs = usage (total cost)

NOTE: Recognized sales amount for a job is actually revenue for the job registered in the program. Recognized amount is the amount of capital gain/loss that must be reported on the taxpayer's tax return in any given year. The amount recognized refers to the tax implications of the sale of an asset or investment and will take into account any selling or brokerage fees. The amount recognized may differ from the amount realized, since the amount realized is not typically used in a taxable situation. Accrued sales amount represents recognized expenses that have been incurred during the period of the job but for which no document has yet been created. Accrual represents the accounting method known as accrual basis; revenues and expenses are recognized when they are accrued, that is, accumulated (earned or incurred), regardless when the actual cash is received or paid out.

I hope this helps.

Thanks,

Steve

Quick Links