AXIS Diplomat 2006 Job Costing Options

Sales Invoice Production from Job Costing

This option allows the AXIS Diplomat 2006 Job Costing module to link to an AXIS Diplomat 2006 Accounts Sales Ledger.

It allows automatic production of sales invoices for fixed price and time and materials jobs. The sales invoices produced are written to the Daybook, and are printed and posted to the ledgers via the Accounts system. In addition there is a Work-in-Progress valuation facility which updates the Nominal Ledger with work in progress value adjustments.

For some jobs it may not be appropriate to produce sales invoices, for example, where all employees' hours are recorded through Job Costing, a 'job' must be provided for non-chargeable time. Such internal jobs may also be used for costing works orders where the orders are for stock.

Fixed Price Jobs

Fixed price jobs are those for which a fixed price quotation has been given, and the job will be done for that price, no matter what the cost. Where variations are chargeable, a separate job on a time and materials basis could be set up to handle variations.

Normally one invoice will be produced when the job has been completed with the invoice description being used as the invoice text. If stage payments are required the appropriate invoice may be created through the Job Costing system by entering Special Invoice Lines.

The text and amount entered will appear on the invoice produced. Alternatively, an invoice may be raised outside of the Job Costing module and recorded using Sales Invoice Booking. The amount of any such Special Invoice Lines or Sales Invoice Bookings for the job will be deducted from the quoted price when the final invoice is produced.

The job record holds the details of the customer account number, the customer's order number (if any), the sales analysis group code (which determines the nominal ledger account to which the sale is to be posted and the VAT rate to be applied), and the order source code and department code (for analysis purposes), for transfer to the daybook records within the AXIS Accounts module.

Time And Materials Jobs

Time and Materials Jobs are those which are invoiced on the basis of the costs actually incurred during the job. The costs booked (including calculated overheads, if the Automatic Overhead Calculation option is set) are uplifted by the margin on cost percentage, specified for each operation and expenditure code.

Invoices may be produced at any time, and may be limited to the costs incurred during a specified period. Once a cost has been invoiced it cannot be invoiced again. The invoice description for the job will appear on the invoice, but the amounts charged will appear against the invoice description of the expenditure groups to which the various costs relate. The date of the earliest and latest cost booking included will be shown, unless a period has been specified, in which case that period will be shown. Special Invoice Lines may also be entered for the job, and will appear on the next invoice raised.

The job record holds the details of the customer account number, the customer's order number (if any) and the order source code and department code (for analysis purposes), for transfer to the daybook record.

Internal Jobs

Internal jobs are any jobs for which invoices are not to be produced. This may be because the costs incurred are to be borne by the company, or sales invoices are to be produced outside the Job Costing system. In the latter case, the Sales Invoice Booking function may be used to record the value of these invoices and to transfer the costs recorded against the job from Work in Progress to Cost of Sales.

Internal jobs may be optionally included in the Work-in-Progress Valuation, and analysed by department in the nominal ledger.

Coding

The Sales Invoice Production feature requires the Operation and Expenditure Codes and the Expenditure Group Codes to be used for more than the analysis of costs.

For invoicing purposes on Time and Materials Jobs, the Operation and Expenditure Codes (the most detailed level at which costs are recorded) determine the mark-up to be applied to each cost (including overheads).

For example, if an item costs the company £10.00 to purchase and is to be invoiced at £20.00 then a margin on cost of 100% must be set on the appropriate expenditure code record. There needs to be at least one operation code for each margin on cost applied to labour costs, and one expenditure code for each margin on cost applied to non-labour costs.

Each Operation and Expenditure Code is then linked to an Expenditure Group Code, which determines the description to appear against the charge on the invoice, and also the sales analysis group code to be used within the associated Accounts system.

For the automatic Work-in-Progress Valuation function, the Operation and Expenditure Codes determine the Nominal Ledger Work-in-Progress account to which uninvoiced costs are to be posted. Each Work-in-Progress account is linked to a Cost of Sales account for the double-entry. This link is created or amended via the Job Costing system whenever a Work-in-Progress account is specified by the operator.

Just one Work-in-Progress account may be used for all operation and expenditure codes or different accounts may be specified to provide a breakdown of work in progress within the nominal ledger.

Sales Invoice Production

For Fixed Price Jobs, any jobs with uninvoiced Special Invoice Lines or which have a completed date set and which have not yet been invoiced, will be eligible for an invoice to be produced.

For Time and Materials Jobs, any jobs with uninvoiced Special Invoice Lines or uninvoiced costs will be invoiced. For jobs not yet completed only those costs falling within the specified booking dates will be invoiced.

Invoices will not be produced unless the invoice total is greater than the minimum invoice value specified. Any customer discount and/or settlement discount will be applied to the invoice. VAT is applied at the current rate determined by the sales analysis group code, as recorded on the job record for Fixed Price Jobs or against the Expenditure Group for Time and Materials Jobs.

Work-in-progress Valuation

The Work-in-Progress Valuation automatically adjusts the value of the Work-in-Progress accounts in the nominal ledger of the linked AXIS Accounts company to the value of work in progress recorded in the Job Costing system. The double-entry to the Cost of Sales account(s) is fully automatic. The Work-in-Progress value of Internal Jobs may be excluded if required.

The Work in Progress Valuation would normally be run at period end, when all costs for the period have been entered, and after all sales invoices for the period have been produced or booked.

The current value for each department of each Work-in-Progress account in the balance sheet will be adjusted to zero by an appropriate journal, the double entry being to the linked Cost of Sales account.

All uninvoiced costs in the Job Costing package will be accumulated for each nominal department (as recorded on the job record) within each Work-in-Progress account specified for the operation or expenditure codes.

Journals will then be created for each accumulated total, with the double-entry to the corresponding Cost of Sales account(s).

Analysis

Reports analysing costs and sales value by cost are provided.

Total Cost Analysis by Cost Type reports all invoiced costs, while Work In Progress Analysis by Cost Type reports all uninvoiced costs. (Costs will include overhead values if the Automatic Overhead calculation feature is set).

Total Income Analysis by Cost Type reports all invoiced costs uplifted by the margin on cost, while W.I.P. Income Analysis by Cost Type reports all uninvoiced costs uplifted by the margin on cost.

Override By Job

There are a series of options available which allow parameters held in the coding structure to be overridden by optional additional information held on the job record.

'Margin Override by Job' allows a Margin on Cost to be held for individual jobs. For any job with a Margin on Cost set, all costs will be uplifted for invoicing and analysis purposes by that margin rather than the margin specified against the appropriate operation or expenditure code.

'WIP Account Override by Job' allows a Work-in-Progress account to be held for each job. Where such an account is specified for a job, all analysis and valuation of costs for the job will be to that Work-in-Progess account rather than to the account specified against the appropriate operation or expenditure code.

'Sales Group Code Override by Job' allows a sales analysis group code (which also determines the nominal sales account and VAT rate) to be held for each Time and Materials Job; (Fixed Price Jobs always have a sales analysis group code set). Where such a code is set on the job record, the value of all invoices produced will be analysed to that sales group code, rather than to the sales group code specified against the appropriate expenditure group.

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