Chronicle’s Work in Progress (WIP) and unearned sales report gives you an idea of what you have earned, invoiced, earned but not invoiced and sold but not earned.
You can get this information all without having to enter or export the information to an Excel spreadsheet and spend hours creating formulas to do the math! You are already entering departments on jobs and the numbers …. Why not let Chronicle do the math for you!
The following information must be present in Chronicle for the math to work:
- labor hours
- invoiced amounts
- sub/material costs
- labor burden percentages
- targeted gross profit percent
And although not part of any calculation, activities do need to be completed in the job file so you can see how much of the job has actually been done.
Once all this information is in Chronicle, the report runs itself!
Here is how to set this up:
- The labor burden % should be entered on the Labor/Budget tab of the Main System Setup. This gives a more accurate picture of what the actual costs are.
- The targeted gross profit % must be entered on the General sub tab of the Department tab in the Main System Setup. This is what you expect to profit on any given department of a job.
- All labor must be entered in Chronicle and invoices and sub/materials costs must be entered in QuickBooks.
- It is critical to all other calculations that you enter the sold price amount for each production department in the ‘sold price’ field found on the dept/activity tab of the job file.
Here is how the calculations work for the columns of the WIP report:
- Projected costs is the sold price multiplied by the targeted gross profit %.
- Actual costs to date adds all labor, labor burden, and sub/material costs together.
- % complete (actual vs projected costs) is a percent of the actual costs to the projected costs. **see below
- Total earned to date is %complete multiplied by the sold price.
- WIP: earned revenue not yet invoiced is earned to date minus the amount of invoiced to date.
- Unearned sold value is the sold price minus the earned to date amount.
- Remaining to spend is the projected costs minus the actual costs.
- Estimated gross profit is the sold price minus the projected costs or actual costs, whichever is greater. Using whichever is greater will give you more accurate numbers.
- Activities complete is based on the number of activates completed for the department
Lastly, since job overruns are sometimes unavoidable, from the report screen you are able to adjust the figures for the sold price or projected costs to reflect what actually happened with the job finances. This will make all other calculations more accurate.
**For example, a department’s sold price is $100,000 and we have projected costs of $50,000. When the report shows it at 50% complete we should have spent $25,000 in actual costs and can now do an incremental billing for the first half. If you over spend on a department, you can adjust the projected costs in the report so that the %complete more accurately reflects where you are in the job. This figure is really important for bigger jobs like construction. In any case, if in the job file the department is completed then this report will see the department as 100% completed.