If you’re a contractor, one of the important factors in estimating costs is recouping equipment & vehicle costs. It’s simpler when it’s used for only 1 job or one type of job, but when it’s used frequently for a variety of purposes, it can be tougher. I’ve seen a variety of techniques – some have worksheets, some ask their accountants or peers, some use QuickBooks classes, and some just guesstimate. There are 2 parts to equipment costs for jobs – what you need to cover for the cost of ownership for this piece of equipment (or vehicle or trailer) and how much it cost to use it on the job. Today let’s look at a way that might be useful in tracking the actual costs of you have a better idea in the future how to estimate.
Chances are, you have these costs in your books, but they’re scattered – depreciation in one place, insurance in another, maintenance & repairs somewhere else. That can make it tough to gather all that information to say here are your costs.
First, you can take advantage (if you haven’t already) of using the Fixed Asset Item List so at least you have 1 place where you can see all your individual fixed assets.
When purchasing the item, choose the Items tab on the check, credit card charge or bill and then type in the name of the equipment or vehicle.
When asked what type of item, select Fixed Asset and you’ll see this screen
Now to tracking costs. Here’s an idea that has worked for some of my clients.
1. Treat them as “jobs” (or sub-customer if you use QuickBooks Online) of a customer called Equipment or Vehicles. List each one you want to track.
2. As get bills, write checks or have credit card charges, use Account (or Item) you want (e.g. repairs & maintenance, registration, insurance, interest…) and select the specific vehicle or piece of equipment for the customer:job.
3. Then you can run reports like P & L by Job or Job Profitability Summary report for your equipment & vehicles.
a. Assuming you want to view more than one “job”,
i. Click on Customize
ii. Click on the Filters Tab
iii. Scroll down to Name and select Multiple names…
Either type the name you want or scroll down and select the “names” you want
Would love to hear if you decide to use this method, and if so, how you like it. Let me know if you have any questions or need assistance.