Comments on: Outsourced or Sub-Contract Work in QuickBooks http://www.sleeter.com/blog/2011/03/outsourced-or-sub-contract-work-in-quickbooks/ The Authoritative Source for Small Business Accounting Solutions Wed, 16 May 2012 22:51:51 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: Michael http://www.sleeter.com/blog/2011/03/outsourced-or-sub-contract-work-in-quickbooks/comment-page-1/#comment-117928 Michael Fri, 27 Apr 2012 03:14:27 +0000 http://www.sleeter.com/blog/?p=700#comment-117928 Got it. Thanks! Got it. Thanks!

]]> By: Charlie Russell http://www.sleeter.com/blog/2011/03/outsourced-or-sub-contract-work-in-quickbooks/comment-page-1/#comment-117900 Charlie Russell Fri, 27 Apr 2012 01:12:10 +0000 http://www.sleeter.com/blog/?p=700#comment-117900 Michael, take a look at the information in this article: http://www.sleeter.com/blog/2011/02/item-types-in-a-quickbooks-bill-of-materials/ If you use a service item, if you pay for the service that posts the cost to the account. When you use that same service item in the BOM, it will pull the cost out of the account and put it into the asset cost of the assembly. Michael, take a look at the information in this article: http://www.sleeter.com/blog/2011/02/item-types-in-a-quickbooks-bill-of-materials/

If you use a service item, if you pay for the service that posts the cost to the account. When you use that same service item in the BOM, it will pull the cost out of the account and put it into the asset cost of the assembly.

]]> By: Michael http://www.sleeter.com/blog/2011/03/outsourced-or-sub-contract-work-in-quickbooks/comment-page-1/#comment-117870 Michael Thu, 26 Apr 2012 23:04:55 +0000 http://www.sleeter.com/blog/?p=700#comment-117870 Thank you, Charlie. How would you handle the following situation? We purchase a leather hide that we then ship to a vendor to cut in pieces to our specifications. That vendor (or another) then sews those pieces together to create a sub-assembly that we then use to build up multiple chairs. We would like the cost of the components of the leather per chair and the cost of the cutting and sewing to be reflected in the COGS per chair. It would seem that we should issue a build for "outsourced cutting and sewing" on the hide, to record that we no longer have the hide, and then upon receipt of the sewn pieces, build the sub-assembly from the "outsourced" assembly and add prices for the cutting and sewing as service items. But then how to classify the service expense when the PO is issued to the vendor, and we receive the items and pay the bill? Wouldn't that be double counting? Thank you, Charlie. How would you handle the following situation? We purchase a leather hide that we then ship to a vendor to cut in pieces to our specifications. That vendor (or another) then sews those pieces together to create a sub-assembly that we then use to build up multiple chairs. We would like the cost of the components of the leather per chair and the cost of the cutting and sewing to be reflected in the COGS per chair. It would seem that we should issue a build for “outsourced cutting and sewing” on the hide, to record that we no longer have the hide, and then upon receipt of the sewn pieces, build the sub-assembly from the “outsourced” assembly and add prices for the cutting and sewing as service items. But then how to classify the service expense when the PO is issued to the vendor, and we receive the items and pay the bill? Wouldn’t that be double counting?

]]> By: Charlie Russell http://www.sleeter.com/blog/2011/03/outsourced-or-sub-contract-work-in-quickbooks/comment-page-1/#comment-682 Charlie Russell Sun, 27 Mar 2011 17:01:32 +0000 http://www.sleeter.com/blog/?p=700#comment-682 Jim, as you know, there are a number of ways of dealing with the cost. It all depends on how you are paying for that, and how you want to handle the accounting. Many variations. A simple way is to add an "other charge" item in the BOM. That works if you have a fixed cost per assembly built, or at least a good estimate. You can put it either in the outsourced BOM or the higher level BOM, depending on how you want to deal with the timing issues. Or you can make inventory adjustments to the assembly each time you build some, if the costs vary quite a bit from time to time, or if the costs are per "run" instead of per "item". Or you can just not worry about including the cost in the assembly and treat it as an overhead cost. Lots of ways of dealing with it, and the best choice really depends on your particular situation. Jim, as you know, there are a number of ways of dealing with the cost. It all depends on how you are paying for that, and how you want to handle the accounting. Many variations. A simple way is to add an “other charge” item in the BOM. That works if you have a fixed cost per assembly built, or at least a good estimate. You can put it either in the outsourced BOM or the higher level BOM, depending on how you want to deal with the timing issues. Or you can make inventory adjustments to the assembly each time you build some, if the costs vary quite a bit from time to time, or if the costs are per “run” instead of per “item”. Or you can just not worry about including the cost in the assembly and treat it as an overhead cost. Lots of ways of dealing with it, and the best choice really depends on your particular situation.

]]> By: Jim Ernest http://www.sleeter.com/blog/2011/03/outsourced-or-sub-contract-work-in-quickbooks/comment-page-1/#comment-660 Jim Ernest Sat, 26 Mar 2011 09:41:37 +0000 http://www.sleeter.com/blog/?p=700#comment-660 Only thing I don't see is accounting for the cost of outside processing, that cost is part of the final sub-assembly PCB-outsourced that is received. Only thing I don’t see is accounting for the cost of outside processing, that cost is part of the final sub-assembly PCB-outsourced that is received.

]]> By: J Ross Beasley http://www.sleeter.com/blog/2011/03/outsourced-or-sub-contract-work-in-quickbooks/comment-page-1/#comment-648 J Ross Beasley Fri, 25 Mar 2011 14:06:49 +0000 http://www.sleeter.com/blog/?p=700#comment-648 I like the second method; it seems much cleaner. I like the second method; it seems much cleaner.

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