Allocating Transaction Amounts to Projects

The ability to track job costs, such as labor charges, materials, overhead, and licences, is essential when you want to determine overall job profitability, or need to provide an estimate for a future project.

When can I allocate transaction amounts to a project?

When you record transactions, you can associate individual line items or the total amount with specific projects. A single line item amount can be allocated to one or more projects, or you can allocate entire transactions to one or more projects.

By default, all revenue and expense accounts allow project allocations. You can also allocate entries associated with asset accounts, but you must first set up the asset accounts manually to do so.

Transactions in which you can allocate amounts

Allocation methods

Transaction amounts are allocated to projects by a specified amount or as a percentage. For payroll transactions, you can also allocate by the number of hours the employee worked on a project for a specific pay period.

Allocating payroll expenses

Allocating expenses for salaried employees: If projects are set up to allocate payroll expenses by hours, you can allocate payroll amounts for an employee who is on salary when you process their paycheck. (Enterprise)

Allocating expenses on a payroll check run: When you process a payroll check run, you first have to determine if you want to apply the allocation to all paychecks or just one or more paychecks.

• If you want to apply the allocation to all paychecks, you can enter the allocation in one paycheck and then apply the allocation to all paychecks by selecting Apply This Allocation to the Entire Transaction in the Project Allocation window.

  If you process a payroll check run in which some employees' wages are calculated hourly and others are salary-based, and then you apply an hourly employee's allocations to all of the employees in the check run, the salaried employee allocations will be calculated as a percentage, based on the hourly employee's distribution of hours.

• If you want to allocate to just one or more paychecks, in the Payroll Cheque Run window, double-click in the Allocation column in each employee record line and enter their individual allocation in the Project Allocation window.

Industry-specific allocation examples

(compiled by Bruce Favreau c2003)

Non-profit

Set up projects for each donor to track the receipt of pledges and donations. This will make it easy generate a report on tax receipts issued to each donor.

Agriculture

Assign a project for each livestock or crop type. You can allocate revenue and costs to help you assess the profitability of managing different types of livestock or crops.

Manufacturing

Create a project for each job (manufacture of custom tools or mould building) or each product line (such as the mass production of plastics).

Real Estate/Property Management

If you set up a project for each building you sell or manage, you can track revenues and expenses incurred for each site. You can also set up service items for each expense directly related to the sale or management of a home (such as the different forms of advertisement on the Internet, TV, Radio, Newspaper, or the services required to maintain a property: management, laundry maintenance, business licensing).

Professional Services

Many professionals (such as architects, lawyers, engineers) have significantly sized, sometimes multi-year, projects for which they would like to track costs. They want to know whether a particular job is profitable and whether the costs match the final bill to the client. Since much of their cost is labor, it is important that they set up and use payroll to allocate labor hours to particular projects. Lawyers and others who charge clients for disbursements also need to allocate expenses like courier fees, photocopying, searches, and other payouts. As long as all items are allocated, no items will be missed to charge back for disbursements.

Personal Services

Many service businesses (such as advertising agencies, consultants, graphic artists, interior designers, photographers) have discreet projects/jobs for which there can be significant costs. You can track those costs against the revenue generated by theses projects/jobs. As some of these business costs are primarily labor-related (as opposed to materials), have employees track their time per project, and allocate payroll costs to the various projects.

What do you want to do?

Set up an asset account to allocate to projects

Allocate transaction amounts to a project

Change your method of project allocation

Generate a project report