For new home construction jobs, we work based on a flat rate big price paid across multiple stages of the project. However, we need to pay sales tax on and account for actual inventory items used.
I have two options in our current process:
1) Create Estimate with estimated time + materials. Sell estimate into new job, so all materials are carried to invoice. Adjust invoice based on actual time + materials. Send customer a dummy invoice from Quickbooks with their flat rate price because we do not want them to see the itemized actuals. Major con - customer can't pay through ST Payments.
2) Create New Job with no estimated time + materials. Send customer invoice through ST that shows a single item ("Construction") with their flat rate price. Later, add an adjustment invoice where I remove the construction item and add all of the actual time + materials. Customer never sees adjustment invoice. Major con - can't take advantage of estimate templates, so have to add hundreds of inventory items manually.
Is there a better way to be doing this?? Not loving our current process.
We are dealing with jobs in progress we cannon complete that are active across several months during the project because we also do commercial new construction. If you are able to complete & export your jobs/invoices every month, than QB is the best way to go for calculating sales tax. Within QB, you'd then isolate your construction invoices in your COGS account which gives you the item cost. If your construction has it's own business unit, then it should be pretty easy to do. If you also have ongoing, incomplete jobs that need to cross months, let me know & I'll get you that workflow of how we finally got the reports we needed. It's been a process for sure.
Thanks so much! We definitely want to be paying sales tax on the material cost (I usually manually edit the price to cost, so this seems much smarter). How does the sales tax flow through to Quickbooks from ST if it is not calculated on the invoice?
I do have Projects activated, but have not been using invoicing in this way. Do you have materials attached to the job, but then you use the Project Invoice to send to the customer?
We pay use tax on materials used, so we run project costing reports, pull the numbers and calculate and pay the sales tax. @pmora Pam is our accounting manager and my have more insight on that part.
We use inventory so we do add all materials and equipment to the estimate and then the job but we do all billing through the project invoice. We are trying to get the pay apps to work also but are having some issues with double costing.
You are paying sales tax on cost not price so if the materials are not marked as chargeable then they will not show at all on the job invoice. Do you have the "projects module" active on ST? We create progress billing invoices directly through the project so we don't send the "job" invoices to the customer.