17 Nov Ask the Expert – Balancing the Profit & Loss by Job
Ask the Expert – Balancing the Profit & Loss by Job
Q – I have been job costing all the expenses related to my projects and looking at the Profit & Loss by Job to see how my business is doing. I just returned from meeting with my accountant for some year end planning and he said I have a loss? It makes no sense to me, can you help?
A – The Profit & Loss by Job is a standard report that is created by looking at all the transactions that have been specifically coded to a job. Anything that has not been coded to a job is ignored. Therefore, the Profit & Loss Standard and Profit & Loss by Job should be compared regularly to make sure that they continue to balance.
To get them back in balance, create both reports and look at them side by side. For any accounts that do not match, double click to drill down to the detail to see which transactions need to be corrected. Be sure to create a “job” for the business expenses that are not specifically attributable to a job. Also, keep in mind that some reclassification journal entries may be required for payroll and discount related transactions.