81807

What are the different methods of tracking work-in-progress on financial statements?

Resolution:

By default, Ajera tracks work-in-process labor, expenses and consultant costs as accrual entries on the GL. Ajera also tracks unbilled labor, expenses and consultant costs as GL accrual entries. Ajera creates the entries based on the GL accounts you select in Company Preferences. You can view these entries in the session journal and on the financial statements. 

Option #1:  Track Work-in-Progress on the Balance Sheet and Unbilled WIP on the Income Statement. 

By default, Ajera uses this method to track WIP:

1. Select the WIP accounts in Company > Preferences > Balance Sheet Accounts tab.
2. Select the unbilled accounts in Company > Preferences > Income Statement Accounts tab. 

For more information, in Ajera select Help > Index > work-in-progress (WIP).

Option #2:   After talking with our CPA, our company does NOT want to track Work-in-Progress on our financial statements. 

To change Company Preferences:

1. Select Company > Preferences.
2. On the Income Statement Accounts tab, make a note of the accounts currently listed in the Unbilled Labor, Unbilled Expense and Unbilled Consultant fields.
   • Then, change the account in each of these fields to the account selected in the Work in Process – Labor account field on the Balance Sheet tab.
3. Also on the Income Statement Accounts tab, make a note of the accounts currently listed in the Labor Write-off, Expense Write-off, and Consultant Write-off fields.
   • Change the account in each of these fields to the account selected in the Work in Process – Labor account field on the Balance Sheet tab.
     Note: Ajera also uses these write-off accounts if you create a credit memo from Manage > Client Receipts or if you write off an unpaid client invoice in Manage > Client Invoices and do not select the Reduce project billed amount box. Be certain to review the session journals and make journal entries to the account you want the write off in order to offset the Work-in-Process account.
4. On Balance Sheet Accounts tab, make a note of the accounts currently listed in the Work-in-Process Expense and Work-in-Process Consultant fields.
   • Then, change the account in each of these fields to the account selected in the Work in Process – Labor account field.

Ajera records all time & expenses entered from this point forward as an in/out entry to Work in Process - Labor.

To view existing account entries:

1. Select Reports > Financial > Ledger.
2. On the Ledger report, specify the account and the date range.
3. To verify the entries in each session, double-click the session name.