Booking Your Over/Under Billing
At the end of each period, the company determines the amounts of over and under billings using a work-in-progress schedule. In order for the report to be accurate, all costs and billings must be posted prior to creating the Contract Status Report.
G.A.A.P. (Generally Accepted Accounting Principals) suggests special handling for work on jobs in progress across several accounting periods. Calculations and journal entries are performed insuring the correct amount of income is recorded, regardless of what is billed. It is recommended that you run the Contract Status Report monthly, although the IRS only requires annual notification of your over and under contract billings. The Contract Status Report may be printed with or without projected costs. If projected costs are not included, Spectrum uses the current estimated costs in its report calculations. In order to determine which format best meets your company's needs, it is recommended that you thoroughly understand how Spectrum calculates projected and estimated costs.
Complete the following steps to accurately compile your company's Contract Status Report:
- Enter and update all costs and billings into Spectrum.
- On the Site Map screen, click to open the Contract Status Report screen.
- Complete the Selections portion of the screen.
- Complete the Report format portion of the screen if you are using a non-Crystal report format.
- Complete the Report period portion of the screen.
- Click the Preview or Print button to view a copy of the Contract Status Report.
- Enter the over and under billing amounts that appear in the Balance Sheet column of the report in the following G/L accounts: Costs in Excess of Billings, Billings in Excess of Costs, and Net Over / Under Billings. To book the billing over and under costs, two journal entries are typically required at the period end.
Further information may be obtained from the following Spectrum Help files:
: Billings Over/Under Cost
- Note: The View Calculations screen is also helpful.
