FlagshipTech
05-03-2008, 07:45 PM
I keep track of billable and unbillable time I spend working for customers. Are the unbillable hours able to be accounted for to show a loss to the company for a certain customer? If so, how would I do that?
Thank you
David
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> I keep track of billable and unbillable time I spend working for customers. Are the unbillable hours able to be accounted for to show a loss to the company for a certain customer?
The answer will depend a lot on your management accounting philosophies--i.e., on how you want to think about costs and returns and how/whether you want to *specifically* assign unbillable hours to your customers.
Here's how I'd do it...
Though you have to keep track of "billable" time for the purposes of sending the customer a bill, the only important number from a management accounting standpoint is the total number of hours spent directly on a customer or activity.
Then to look at profit/loss per customer, you need a report which combines, on a per-customer basis, (1) direct revenues and costs for each customer, and (2) allocated (indirect, or overhead) costs for each customer. The indirect costs might be allocated to each customer based on hours of your time spent per customer--but that's *total* direct hours you spent with each customer, not billable hours (which are irrelevant here, in management accounting terms).
What QuickBooks reports provide that? None that we're aware of. But be looking for a future version of ManagePLUS that will.
Mark Wilsdorf
Flagship Technologies, Inc.
http://www.goflagship.com (http://www.goflagship.com/forums/../)
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So, Does this mean that if I track total hours, The hours I don’t receive a payment for are just hanging around in unbilled costs? If this is true, Is it possible to create an account for these unbilled costs? What do I do with the costs?
Thank you
David
==========
I see...you're tracking billable time in QuickBooks, I suppose. In that case I'm not sure how you may want to handle things.
The point is that from a management accounting standpoint, the total hours you devote to an activity should be the basis for allocating costs to each unit of that activity (each customer, for instance). Billable hours are irrelevant. Or, you can say they're only relevant in terms of billing/revenue generation. They are only loosely linked with the amount of time you've devoted to each activity (customer).
I suggest you do a Google search for "management accounting" and do some reading to get a good grasp of the foundations of management accounting/analysis.
Mark Wilsdorf
Flagship Technologies, Inc.
http://www.goflagship.com (http://www.goflagship.com/forums/../)
Thank you
David
==========
> I keep track of billable and unbillable time I spend working for customers. Are the unbillable hours able to be accounted for to show a loss to the company for a certain customer?
The answer will depend a lot on your management accounting philosophies--i.e., on how you want to think about costs and returns and how/whether you want to *specifically* assign unbillable hours to your customers.
Here's how I'd do it...
Though you have to keep track of "billable" time for the purposes of sending the customer a bill, the only important number from a management accounting standpoint is the total number of hours spent directly on a customer or activity.
Then to look at profit/loss per customer, you need a report which combines, on a per-customer basis, (1) direct revenues and costs for each customer, and (2) allocated (indirect, or overhead) costs for each customer. The indirect costs might be allocated to each customer based on hours of your time spent per customer--but that's *total* direct hours you spent with each customer, not billable hours (which are irrelevant here, in management accounting terms).
What QuickBooks reports provide that? None that we're aware of. But be looking for a future version of ManagePLUS that will.
Mark Wilsdorf
Flagship Technologies, Inc.
http://www.goflagship.com (http://www.goflagship.com/forums/../)
==========
So, Does this mean that if I track total hours, The hours I don’t receive a payment for are just hanging around in unbilled costs? If this is true, Is it possible to create an account for these unbilled costs? What do I do with the costs?
Thank you
David
==========
I see...you're tracking billable time in QuickBooks, I suppose. In that case I'm not sure how you may want to handle things.
The point is that from a management accounting standpoint, the total hours you devote to an activity should be the basis for allocating costs to each unit of that activity (each customer, for instance). Billable hours are irrelevant. Or, you can say they're only relevant in terms of billing/revenue generation. They are only loosely linked with the amount of time you've devoted to each activity (customer).
I suggest you do a Google search for "management accounting" and do some reading to get a good grasp of the foundations of management accounting/analysis.
Mark Wilsdorf
Flagship Technologies, Inc.
http://www.goflagship.com (http://www.goflagship.com/forums/../)