A.1.5a Practice Using Projects

Scenario: This exercise has four parts, with the scenario for each shown as you go through the exercise. Be sure to do all four parts of this exercise in the same Sample company session.

49 steps

QuickBooks

Akadian

Start in the Sample company.

To complete this exercise, you must be in the Sample company. From your QBOA account, click on the Gear icon on the top right corner of the screen, then select Sample company.

Note that you will be logged out of your current account. If you are sure, click "Continue" to confirm.

Be sure to do **all** four parts of this exercise in the same Sample company session.

Now let's get started with the exercise.

Scenario, Part 1

Scenario: Sushi by Katsuyuki has asked your client, Craig, to install a Japanese fountain at the entrance to their restaurant. Craig will be charging them $1,690 for one Rock Fountain, one Fountain Pump, $150 of Garden Lighting, 6 hours of Custom Design, and 2 full days of Installation. Craig would like to make sure that his profit margin stays above 30% for this. Use projects to set up and track this for him.

First we will need to make sure the Projects feature is turned on. Sometimes it is already on in the Sample company. These first few steps assume that it is ***not*** on.

Click the gear icon, then select "Account and settings".

Click the "Advanced" tab.

Click anywhere in the Projects section to make it editable, then click the toggle next to "Organize all job-related activity in one place" (this will turn green to indicate it's turned on).

Click "Save".

Click "Done".

We're now ready to begin our project.

From the left navigation bar, click "Projects".

Click "Start a project".

In the Project name field, type "Japanese Fountain".

In the Customer field, select "Sushi by Katsuyuki".

Click "Save".

Click "Add to project", then select "Invoice".

Notice that QBO already filled in all the Customer information because it is encoded in the Project.

Complete the invoice as outlined in the scenario: ✓ 1 Rock Fountain\ ✓ 1 Fountain Pump\ ✓ $150 of Garden Lighting\ ✓ 6 hours of Custom Design\ ✓ 2 full days (2 x 8 hours = 16 hours) of Installation

Click the down arrow next to Save and send, then select "Save and close".

Note that QBO has automatically begun tracking the Income associated with this project. This is because the accounting method has been set to "Accrual" in Account and Settings. If the client had this set to "Cash," you would not see the income until the invoice was paid. The same is true with the Bill we will see later in this exercise. Also note that QBO automatically tracks the cost of the Fountain and Pump. This is because these are inventory products and were already in stock. The cost of the Garden Lighting has not yet been included, because it hasn't yet been purchased. We'll do that in the next section.

Scenario, Part 2

Scenario: Craig had the Rock Fountain and Pump in stock, but he had to go buy the lighting. He picked up the items for $152.10 from a new vendor called Crystal Lighting Supply. Create an expense for this transaction.

Click the "+New" button, then select "Expense".

In the Payee field, type "Crystal Lighting Supply", then click "+Add New Crystal Lighting Supply".

Click "Save".

On the first line, in the Category field, select "Fountain and Garden Lighting". *Note that there are two similarly named accounts in the Chart of Accounts: Fountain and Garden Lighting, which is an expense sub-account of Job Expenses:Job Materials, and the other, Fountains and Garden Lighting, which is an income sub-account of Landscaping Services: Job Materials. Select the first one.*

In the Amount field, type "152.10".

In the Customer/Project field, select "Japanese Fountain".

Click "Save and close".

Because you indicated on the Crystal Lighting Supply expense that the purchase was for the Fountain project, QBO has added the cost to the Project. You can click the arrows to get more specific detail.

Scenario, Part 3

Scenario: Craig’s employee, Emily Platt, did the design work for the project, but it only took her 5.75 hours. Craig is charging Sushi by Katsuyuki a flat fee, not for her time, but he wants to account for his employee expenses on the project. In total, Emily costs Craig $25 an hour. Use a single time sheet activity to track this.

Before entering Emily’s time, you will need to enter her rate. To do this, you will need to go to the Projects Center. The Projects Center is where you can see the status of all projects at once.

Click "All projects".

Note that you will likely need to close the informational pop-ups in the Sample company before proceeding with the next step.

Click "Manage settings."

Click "Cost rate calculation."

On the line for Emily, click "Add".

In the Cost Rate field, type "25", then click "Save".

Note that this is not how much Emily is paid. Rather, the cost rate is how much Emily ***costs*** Craig, which includes not only how much she is ***paid***, but also the taxes and other overhead he has to pay. This is also not the ***billable*** rate for Emily, which is what he would charge someone else for her time.

Click the "X" on the top right corner to exit.

Next, we will add her time to the project.

Click "Japanese Fountain".

Click "Add to project", then select "Time".

Note that Emily is already selected. This is because she is alphabetically the first employee.

In the Service field, select "Design".

We are not charging the client for her time, so leave “Billable” unchecked.

In the Time field, type "5.75".

Click the "Tab" key on your keyboard. *Note that QBO will automatically convert the decimals to hours and minutes.*

Click the down arrow next to Save and new, then select "Save and close".

The cost of Emily's time has now been added to the project.

Scenario, Part 4

Scenario: Craig’s employee, John Johnson, did the installation, which should only have taken two days. On the second day, however, he ran into some problems with the fountain nozzle. He called his buddy, Geoff Hicks, to come help. Geoff stopped by with some parts from his hardware store, and on the third day, John finished up after an additional 4 hours. Help John fill out a weekly timesheet to track this, then enter the bill Craig received from Hicks Hardware, which included $150 worth of labor help and $23.50 worth of parts.

Before entering John’s time, you will need to enter his rate as well. Start by returning to the Projects Center.

Click "All projects".

Click "Employee hourly rate".

On the line with John, click "Add".

In the Cost Rate field, type "40", then click "Save".

Remember, this is not how much John is paid. Rather, it is how much John costs Craig, which includes not only how much he is paid, but also the taxes and other overhead Craig has to pay. This is also not the billable rate for John, which is what Craig would charge someone else for his time.

Click the "X" on the top right corner to exit.

Click the "+New" button, then select "Weekly timesheet".

In the dropdown at the top, select "John Johnson".

On the first line, in the Customer/Project field, select "Japanese Fountain".

Important! There has been a recent glitch with the Sample company in which the Japanese Fountain project has disappeared from the Customer/Project field list. If this happen to you and you do not see it, a workaround would be: - Exit the Weekly timesheet - Go back to the Japanese Fountain Project - Enter each day's time for John using the same steps as when you added Emily's time (see above Steps 28-32). - After entering the time, pick up the exercise at Step 44 If you do not experience this glitch and see the project on the list, as shown in Step 40, continue with the exercise as is.

In the Service field, select "Installation".

Add the hours worked: Type "8" for Monday, "8" for Tuesday, and "4" for Wednesday.

Click the down arrow next to Save and new, then select "Save and close".

Now, add the bill from Hicks Hardware.

Click the "+New" button, then select "Bill".

Note that you will likely need to close the informational pop-ups in the Sample company before proceeding with the next step.

In the Vendor field, select "Hicks Hardware".

Complete the Category details grid as indicated in the scenario, remembering to indicate Japanese Fountain in the Customer/Project field for each: ✓ $150 of Maintenance and Repairs (Job Expenses:Cost of Labor:Maintenance and Repairs)\ ✓ $23.50 of Fountain nozzle parts (Fountain and Garden Lighting) *Note: As mentioned before, remember to use the Fountain and Garden Lighting account, which is an expense sub-account of Job Expenses:Job Materials (the first one), and not the Fountains and Garden Lighting account, which is an income sub-account of Landscaping Services:Job Job Materials.*

Click the down arrow next to Save and schedule payment, then select "Save and close".

So did Craig meet his goal of a 30% profit margin? Go back to the Project Center to find out.

Click on "Japanese Fountain".

Unfortunately, he did not. Maybe if John hadn’t had trouble with the nozzle and had to bring in Geoff, he would have.

🎥 Video

Want to follow along? [Click here](https://youtu.be/lLJ6gcxqYxc) for our video walk-through.

📚 Get the Full Course

This exercise comes from our advanced level ProAdvisor certification course. Do more like it and pass your QuickBooks Advanced ProAdvisor certification course in one weekend by [clicking here.](https://www.fastandeasyqbo.com/advanced)

📝 Feedback

Questions/Problems/Concerns?[ Send feedback.](https://www.bookwidgets.com/play/k6rmQMKk-iQAEzXMdagAAA/BEXUQBE/feedback-scrib?teacher_id=6434462993219584)