One project management feature in NetSuite is the Job Costing and Project Budgeting feature. While NetSuite combines these two aspects of project financials into a single feature, each part has a unique function. Let’s take a look at each one separately.
Job Costing
First, the job costing side of this feature lets you account for the labor costs of a project. The employees working a single project may have different individual rates, and when they enter their time for the project NetSuite will be able to easily calculate what the cost will be to the project based on their rates. The financial impact will then be recorded in the General Ledger.
Project Expense Types
When this feature is enabled, NetSuite will use project expense types to connect the cost of the work to the correct account. To set up new project expense types, navigate to Setup > Accounting > Setup Tasks > Project Expense Type > New. On this page, you will name the expense type and associate it with an account. Once a project expense type is set up, the cost of labor for a project will be posted to the associated account.
Posting Time Transactions
In order for the time employees have worked on a project to be calculated with Job Costing, the time itself must first be posted. To post a time transaction, navigate to Transactions > Financial > Post Time. On this page, you will see a list of time that has been tracked on various projects. You can use the filters at the top of this page to narrow down the list of results. Then, select the specific time transactions you wish to post and hit Submit. With the Job Costing feature, journal entries will be grouped by project when you post time transactions.
Project Budgeting
While the job costing side of this feature manages the cost of work that has actually been done, the project budgeting side of this feature allows you to set up both cost and billing budgets for your projects. After enabling the Job Costing and Project Budgeting feature, a Budget tab is added to both project and project task records.
Budget Subtabs
The Budget tab has a Cost Budget subtab and a Billing Budget subtab. For each of these, you can set some calculation preferences. The budgets that are created here will be by month, and the overall project budget will reflect the budgets that are set on related project tasks.
Project Budget Preferences
There are some preferences you can set for labor budgeting in Accounting Preferences. In the Budget Categories section of the Projects subtab, you can determine how detailed your labor project budget should be and which items or categories will be used to depict labor. The categories you set here will be the categories available under the Budget subtab on Project records.
Reporting
How can you track the accuracy of your budgets? When you enable the Job Costing and Project Budgeting feature, you will have access to several key reports. These reports include the following:
- Project Cost Budget vs. Actual
- Project Billing Budget vs. Actual
- Project Task Cost Budget vs. Actual
- Project Task Billing Budget vs. Actual
- Project Profitability
With these reports, you will be able to see comparisons of how the various budgets for your projects worked out in reality. This information will enable you to make more accurate budgets in the future.
Conclusion
The Job Costing and Project Budgeting feature in NetSuite gives project managers greater insight and control over their projects’ finances.
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