Allocating other costs to a Project

It's possible that a business could have purchased costs and materials that will be used for multiple projects. When costs are initially incurred, they may not have been purchased for a specific project, but as items are consumed, adjustments can be made to ensure that the costs are reflected against a project.

First, we'll use a journal to adjust for employee time.

Using journals to adjust a project

If our project overview displays £762.50 of HOURLY TIME COST, this will not be visible in the Project profitability (without time costs) report. We can make the value appear on both the overview and the report with the following journal entry:

Figure 6.34 – Using a journal to adjust payroll costs on a project

Both lines 1 and 2 of the journal entry are coded to the same account category, Payroll expenses. This ensures the overall profit of the business is not affected. However, line 1, posting the...