Billable Amounts in Clients & Profits.
There is a concept in Clients & Profits programs which,
once understood, makes interpreting Clients & Profits
job reports very simple. Read carefully the following equation:
Gross (not net) costs minus billings equals billable. Once
you fully understand this "formula", Clients & Profits
job reports become very clear and easy to use.
Gross Costs Defined
Accounts payable invoices and direct disbursement checks are assigned
a gross amount during data entry when distributed to a job and task.
Note that net cost times markup percentage equals gross cost.
The gross amount for a time sheet is defined as number of hours x billing
rate. (The net cost for a time entry is number of hours x cost rate.)
Billings are simply accounts receivable invoices added against a particular
Note again: Gross Costs minus Billings equals Billable. Think about
the following three reports in terms of this formula.
The Job Summary
Note carefully that the costs column on the job summary is showing
net, not gross, costs. The gross costs are not shown on the job summary.
To apply the above "formula" and arrive at the billable figure on the
job summary, it is necessary to look at two other job reports:
Job Costs Reports
This report details every cost on the job ticket. It shows both net
and gross costs. Net cost is your cost. Gross costs are amounts to
be billed to your customers.
Note that in some versions, the gross costs column on the Job Costs
report is labeled billable. This is not to be confused with the billable
column on the job summary report. Billable on the job costs report
means total gross costs, before any billings. Billable on the job summary
means gross costs minus billings to date; the "formula" applies.
Let's add to our formula. Gross costs (billable column on the job costs
report) minus billings equals billable (as shown on the job summary).
The Job Billings Report
This report simply shows all accounts receivable invoices applied to
the job in question. This equals the billings column on the job summary.
The Unbilled Column
Based on the previous discussion, you can see that the billable column
on the job summary represents gross costs entered against the job that
have not been billed.
Note that the billable figure could easily be a negative number. This
would mean that billings have been applied against the job in excess
of gross costs. As costs are added, the billable column will climb
toward zero. This is a key point in understanding the reports.
- Assume $100.00 is billed against task PRIN on job number
001. There have been no costs entered against this task.
The job summary will show a negative $100.00 billable amount
for this task.
- Next an a/p invoice is added with a net $25.00 cost and
gross $50.00 cost against job 001, task PRIN. The job summary
will now show costs of $25.00, billings of $100.00, a billable
amount of negative $50.00.
- If a second a/p invoice is added with a net $25.00 and
gross $50.00 cost against this same job and task, the billable
amount for task PRIN will climb to zero on the job summary
. The job summary will now show costs of $50.00, billings
of $100.00, and billable $0.00.
In other words, when all gross costs are fully billed, the
billable amount on the job summary will equal zero.
Other Job Reports
Other job reports are also based on this same concept. When interpreting
other Clients & Profits reports, in particular ask yourself if
you are looking at net or gross costs. Costs (net and gross), billings,
and billable are integral parts of all Clients & Profits programs.