This QuickBooks payroll tip discusses how to correct payroll hours incorrectly charged to a job after paychecks have been created and cashed.
Accurately job costing payroll hours and wages is critical for many business types, not just contractors. The information that is entered in QuickBooks Weekly Timesheets and paychecks is only as good as the information that is received from those who are responsible for providing the payroll clerk with the original employee hours spend on various jobs. However, we are all human and, therefore, make mistakes, some mistakes can be corrected more easily than others.
A common mistake that can occur is the reporting of employee payroll hours on one job – - when those hours really should have been reported on another job; for example it was originally reported that employee John Doe worked 20 hours on Job A – in reality those 20 hours were spent on Job B. Quite often this error is reported to the payroll clerk after paychecks have already been processed and the checks have been cashed.
Quite often this situation puts the payroll clerk in a quandary about how to correct payroll hours incorrectly charged to a job.
When the error just involves changing a job {moving the hours from Job A to Job B} and does not involve also having to change a rate of pay; the easiest way to correct payroll hours incorrectly charged to a job is to edit both the timesheet and paycheck detail for the employee and change the job there.
When you edit both the timesheet and the paycheck detail, change the job, and then save your changes, QuickBooks will throw out some warning messages – don’t worry, for once it is ok to ignore these messages. Usually it’s not a good idea to ignore warning messages.
Another situation in which this type of correction can occur is when payroll is being processed, using time data entered in the Weekly Timesheet, and the payroll clerk is verifying the hours entered in QuickBooks against the timecards from the field, she discovers that the timesheet referenced Job A and it should have been Job B. The initial reaction is to just go ahead and make the change in the paycheck detail and call it good. However, what many people do not realize is that when you make a change in the paycheck, while processing payroll, the original timesheet entry is not updated to reflect this updated information – you must also go back and correct the job assignment in the timesheet.
Recap: If it’s just a change in job and not a change in hourly rate/wages; edit both the timesheet and the paycheck detail and make the change. That is the easiest thing to do to correct payroll hours incorrectly charged to a job when it doesn’t have an impact on wages.
A common conundrum for some bookkeepers is to create a job prior to receiving the contract paperwork, so that materials could be ordered – and then finding when the actual contract arrives that the job was assigned to the wrong customer in the QuickBooks Customer List.
While this may not be an every day occurrence, it does leave one wondering if there is a “correct procedure” for moving the job to the correct parent customer, if it can be done at all, or if you just have to start deleting things and starting from scratch.
In most cases, this situation can be correct easily, however, the smaller the amount of transactions associated with the job that you need to move the better.
Follow these instructions carefully:
- Make a BACKUP of your QuickBooks file.
Generate Reports for Job Costing details, to be used for comparison AFTER you have moved the job from one customer to the other.
- Run a Time by Job Detail Report – filtered for only this job (Reports menu -> Jobs, Time & Mileage -> Time by Job Detail -> Modify Report -> Filters -> Customer:Job -> this Job).
- Run a Profit & Loss Report – filtered for only this job.
- Run an Unbilled Costs by Job – filtered for only this job.
- Run an Open Purchase Order Report – filtered for only this job.
- Run a Job Costs by Job and Vendor Detail – filtered for only this job.
- Additional Reports as necessary.
When you have your printed reports and have made a BACKUP of your QuickBooks data file:
- In QuickBooks, you MUST be logged in as the Administrator in Single-User mode.
- Go to the Customer Center -> Customers & Jobs tab -> select this job -> click EDIT.
- On the Address Info Tab you’ll see a Customer drop down menu, use this to select the correct customer.
Right click on the image to enlarge it.
- Change the Company Name, Bill To Address, Contact, Phones, etc. to be the correct information.
- Click OK.
- The Job should now be associated with the Customer you selected.
- REBUILD your QuickBooks file (File menu -> Utilities -> Rebuild Data).
- Run the reports to verify that all the associated transactions also moved.
We hope you have found this tip to be helpful, if so please take a moment to leave us a comment.
A reader asked the following question:
We are a small contractor in San Diego and we are wondering how we get around having to always do an inventory adjustment to get our purchases to the correct COGS account? We have (2) departments but they are both doing construction projects: Service dept does smaller installs and Contracts dept does the bigger jobs so I have been doing a JE to move the material from the Contracts material COGS account to the service COGS account.
Is there an add-on for QB Enterprise 8 that we could use?
Thank you so much for your website/blog. I’ve been reading it faithfully every day!
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There are several inventory add-ons for QuickBooks Pro, Premier and Enterprise; check out these 3rd party add-ons at the Intuit Marketplace.
Recording costs and income with an item
Based on your comment about “always having to do an inventory adjustment in order to get your Purchases to the correct COGS account”, makes me think that perhaps your items are not correctly set up.
Make sure that your QuickBooks Inventory Items are set up so that they capture both the cost/purchase account as well as a sales account; this method is called a “double-sided” item.
When any type of QuickBooks Service, Inventory, Non-Inventory, Other Charge Item is set up this way you are able to capture the purchase price as well as the sales price.
When you enter a bill from a vendor for the inventory item (or write a check) you should be using the ITEM tab and not the Expense tab.
I’m confident that if you aren’t currently using the QuickBooks Purchase Order function that you would find that beneficial also.
Additionally, rather than using Journal Entries to classify whether it was the Service or Contracts Department – consider using “classes” to handle that.
