In this article we look at how direct and indirect costs such as labour and resources can be recovered on a job. We also look at the journal entries that are created.
Before proceeding with this article we recommend that you,
- Have discussed your requirements with your Accountant,
- Have a clear understanding of the costs to be recovered and on what basis, and
- Have an understanding of the Job Costing module in Jiwa 7
Overview
Recoveries are a way in which direct and indirect costs can be recovered through a job or project. These can include expenses such as;
- Direct labour,
- Indirect labour, and
- Resources costs such as equipment
Before you start adding recoveries to your jobs we recommend that you discuss your requirements with your Accountant in particular the following points as these will have an impact on how the Job Costing module is setup;
- What costs need to be recovered,
- How is your recovery rate calculated,
- What staff records need to be setup in Job Costing for recovery
- What resource records need to be setup in Job Costing for recovery, and
- How are recoveries to appear in the P&L
