However, there are times when the two balances do not match, and this is generally due to including actual time or parts directly onto delivery invoices rather than going through the formal change order process.
The best practice is to make sure that the RFP and Delivery Invoice match at the end of the job. If they don’t, here is how to make them match.
Option 1: Customer is charged/credited for variances
- Create a Change Order in the Change Order module to reflect the modifications created on the delivery invoice.
Option 2: Customer is NOT charged/credit for variances
- Create a change order, like in step one, adding or removing the parts and labor that are the difference – This will capture appropriate cost AND calculate commission appropriately.
- Create an offsetting entry on the Change Order using one of four offsets. These offsets are items you create in the Items module.
- LABOR OVER – used to offset an overage of labor. Set this up as a Labor Item in Items Module
- LABOR UNDER – used to offset an underage of labor. Set this up as a Labor Item in Items Module
- PARTS OVER – used to offset an overage of parts. Set this up as a Non-Inventory Item in Items Module
- PARTS UNDER – used to offset an underage of parts. Set this up as a Non-Inventory Item in Items Module
- The total of the offsetting entries should make the total change order a ZERO BALANCE.
- Remember, we can’t create a negative RFP invoice
Item Setup – we use four separate items so that we can track four different accounts in QuickBooks. Each item will reflect the appropriate General Ledger accounts in QuickBooks. This enables you to report separate overage and underage amounts for parts and labor on their financials.
Some companies prefer to have one account to track all overage and underage from both parts and labor. In this case, you only need two Over/Under items, one for parts and one for labor.
- We separate out labor and parts because they are tracked differently in iPoint transactions. So you want to be sure to offset a labor overage with a labor offset item and a parts underage with a parts offset item.