I’m a contractor and i’m not an accountant. through manager i learned a great deal to get me started. thats the intro.
The question: As a contractor in my pricing i have the following
Job direct cost (all materials and fabrications)
Labor cost (the cost of my labor time in each project)
Over head (every other business cost)
So each one of these items have a percentage in every revenue the business is generating. For Job direct cost and Labor cost i’m clear on how they should be entered in manager. For over head costs most of it are business license renewal, managers and employees not linked to projects salaries, office rent…etc. I know the exact amount in the revenue the business gained for each of the over head cost items i have. But how i should separate them from the rest of revenue to make sure they are not used in other expenses by mistake. Should i create an asset account for each one and allocate these cuts from cash or bank account to that asset account? and if that is correct when the transaction happen like it’s time to pay salary or office rent how i can move them from that asset account to expenses (for Salary i can use payslips i guess) but for office rent what should be the right thing to do.