A vehicle received for repair is received in the workshop.
A requisition paper is raised for the spare parts required to fix the vehicle.
The Store keeper releases the spare parts to workshop on receipt of the requisition paper.
But in the process of fixing the vehicle, other non inventory item (expenses) are incurred such as:
a. Transportation to buy spare parts
b. Towing van
c. Out sourcing of some electrical works not handled by in the workshop
d. Hotel bills, if the vehicle is repaired outside the workshop.
The cost for S/No. a to d is added to the Production Order for repairing the vehicle as is being incurred.
Ok, still explaining for you to understand me,
a. The vehicle to fix is created under non inventory item
b. The production order is raised which captures all the spare parts and expenses as it takes place.
c. The vehicle repair at times may take more than a month.
The challenge here is:
Going by principle of matching concept, the revenue from the repair and all cost incurred to fix the vehicle should hit the profit and loss at the same time.
We want to see other cost incurred to hang somewhere, even though paid for, till the vehicle repair is completed irrespective of the timing.
Our customers wants to see a detail of the jobs done in the invoice received from us.
Referring to point 3. above, how will the hotel bill be stated in the sales invoice so that it will hit revenue and the amount spent on the Mechanic that slept in the hotel hit the expense.
In the Sales invoice, we add a mark up on the actual amount spent on hotel bill to the customer.
This is not an accounting transaction of any type.
I suggest putting these items on a sales order. At that point, there is no financial impact. But when the job is complete, you can copy the sales order to a sales invoice. Meanwhile, you can edit the sales order as additional things are done to repair the car. Items you take from your own inventory can be added. Common non-inventory items can be added like shop charges, hazardous waste disposal fees, etc.
You should not be using a production order, because you are not manufacturing an inventory item.
You should not do this. You are neither buying nor selling the vehicle.
As noted above, you should not do this.
So what? The sales order is capturing all inventory and non-inventory items used. Billable expenses are recording all outside costs. When you are ready to invoice the customer, copy the sales order to a sales invoice. Then add billable expenses according to this Guide: https://www.manager.io/guides/5503.
If you invoice as described above, they will.
Billable expenses will do this for all outside expenses. If you want to track current work in progress for inside expenses, you will need to create a bunch of temporary expense accounts and move costs around with journal entries. That would be a lot of work to track something you are not tracking now. (Your production orders do not track work in progress.) But it could be done.
They will if you invoice as described above.
The hotel bill income will show up in Billable expenses - invoiced. Its cost will show up in Billable expenses - cost. This is explained in the Guides I linked to. The cost of the mechanic can be handled as billable time. See https://www.manager.io/guides/6935. This is invoiced the same way as billable expenses.
Record outside expenses as billable expenses.
Record time charged to the job as billable time.
Record inventory and non-inventory items used on a sales order form during the work. Edit this as many times as necessary. Use it as an internal document to authorize release of parts, etc.
When the job is complete, create a sales invoice by copying the sales order. Then add all the billable time and expenses to it as described in the Guides.
I have read through the guide and have applied accordingly.
With the billable expense and the billable time enabled, the following are observed:
The billable expense (assets) report correctly as the payments for transportation to Mechanic are made.
The billable expense (invoice) appears correctly as the Sales order is turned to Sales invoice, when the transportation (with mark up) is added. The challenge is that the actual amount paid sitting at billable expense (assets) is transferred automatically to the expense side of the profit and loss account.
I wanted to see a situation where at the point the Sales Order is turned into Sales invoice, the income goes up and the payments made, which was sitting at the billable expense (assets), moves to billable expense (cost).
Yes, exactly as stated in the Guide: https://www.manager.io/guides/9652. And, as stated in that Guide, if you want to mark up the billable expense, edit the sales invoice.
The automatic transferring happens only when a sales invoice is created from within the Customers tab, drawing upon the uninvoiced billable expenses. There are two amounts at work here: the amount you actually paid for the billable expense, which ends up in Billable expenses - cost, and the amount you charge your customer for the billable expense, which ends up in Billable expenses - invoiced. You cannot change the first, but you can change the second by editing the sales invoice.
Because you will be creating your sales invoice by copying a sales order, the automatic transfer will not take place. You will be following the procedures in the last major section of the Guide, Adding billable expenses to a sales invoice.
If you have not yet done so, I strongly recommend creating a test company and trying out a few transactions. Check the Summary after each step as you experiment to see the impact of your actions. Of course, it is best to do this in a test business with no other transactions so effects are obvious.
However, I noticed that in the chart of account, I could not merged billable expense (invoice) and billable time (invoice) to any other line item in the chart already.
The miscellaneous income already created in the chart of account, I would have love to see the transportation ( billable expense - invoice) and the hotel bill or overtime (billable time - invoice), use the same miscellaneous income.
is this possible?