QB Never Do #1

Never post to a Cost of Goods Sold (COGS) account from the Expenses tab in the Write Checks screen or the Enter Bills screen, while also assigning a Customer:Job to the transaction. If you do, it creates unbillable "Unbilled Costs."

If you've been doing this and would like to see what I mean, run an Unbilled Costs report. From the Reports menu:

Reports > Jobs, Time & Mileage > Unbilled Costs by Job

Normally you would be able to drop these into a customer's invoice by clicking the Time/Costs button at the top of the invoice screen. However, for a reason unknown to me, these unbilled costs do not show when you click the Time/Costs button.

If you have ever posted to an Expense account from the Expenses tab, while also assigning a Customer:Job, you know that the invoice column at the far right is functional (also known as the Billable column in newer editions of QB). In other words, you can either place a red X there, or not, to indicate that you want to be reimbursed for the cost by your customer. But here was your only clue that posting to a COGS account from the Expenses tab was a bad idea - the column at the far right side of the screen was not functional.

Ideally, Intuit would have programmed a small warning when posting transactions in this manner, but they didn't. Oh well - they're only human and can't know everything.

How to Fix It - What To Do From Now On

Fixing it is a drag and I don't recommend it, especially if you are working in a closed period and there are a lot of transactions. However, if you are absolutely determined, the instructions for moving forward apply for fixing past mistakes.

Set up a Other Charge, Service, or Non-Inventory Part Item that points to the COGS account and also points to a revenue account. Do this by clicking the box that says something like, "This is for assembly items," "This is a reimbursable charge," "This service is performed by an owner," etc. Set up the other fields as necessary. Use this Item from now on when you need to post to a COGS account and assign a Customer:Job to the transaction.

Use this item when fixing old transactions, but make sure of two very important things:

1. The amount of the transaction does not change
2. The Item posts to the same COGS account that the transaction posted to before!

If you are not careful about these two things, you will probably alter the closed period. Your accountant will not be happy with you if this happens! :-)