Encoursa Webinar: GovCon Job Costing

GOVCON JOB COSTING
Presented by Robert Jones, Left Brain Professionals

Host: Liz Briggson, CPA
Connect on LinkedIn:
https://www.linkedin.com/in/lizbriggsoncpa/
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GOVERNMENT CONTRACTS & ACCOUNTING EXPERT
Email: robert@leftbrainpro.com
Phone: (614) 556-4415
LinkedIn: https://www.linkedin.com/in/rjones330/
Website: www.leftbrainpro.com/
Robert Jones CPA, CPCM, NCMA Fellow
 Professional Background
 Masters in Accountancy – College of Charleston
 Business Management, Compliance, Operations
 Controller
 Defense Contracts Manager
 Instructor and Speaker

We Know Government
Contract Accounting

Who we are
Left Brain Professionals is a boutique accounting firm that serves
government contractors. We specialize in accounting system design
& implementation, audit support, training, and cybersecurity
compliance.

Our Team
Robert E. Jones
Government Contracts &
Accounting Expert
CPA, CPCM, NCMA Fellow
Melissa Metzger
Government Accounting &
Finance Advisor
MAFM, CPA Candidate
Steven Bressler
Government Contract
Associate
steve@LeftBrainPro.commelissa@LeftBrainPro.comrobert@LeftBrainPro.com

Learning
Objectives
• Identify the requirements of job
costing.
• List advantages of job costing.
• Define elements of a job cost report.
• List best practices for job costing.

Room Poll
How comfortable are you with your job costing capabilities ?
A. I’m not sure what job costing is.
B. I know what it is, but not sure how it benefits me.
C. I could use some assistance on job costing.
D. I’m an expert on job costing for profitability.

SF 1408 - Required Use of Jobs
2.b Identification and accumulation of direct costs by contract.
One-to-one relationship of internal job/project to external contact/delivery
order (DO)/task order (TO).
NDUSA-20-C-1234 D001
FCUSA-20-D-5678 D002
TLUSA-20-0909 D003
Each DO or TO must be treated as its own contract.
Cont…

Required Use of Jobs, Continued…
2.i Identification of costs by contract line item and by units.
One-to-one relationship of internal task to external CLIN.
Contract Job/Project
NDUSA-20-C-1234 D001
0001 Site Survey D001-0001 Site Survey
0002 Soil Testing D001-0002 Soil Testing
0003 Grade Planning D001-0003 Grade Planning
Cont…

2.i, Continued…
FCUSA-20-D-5678 D002
0001 P/N ABC123 D002-0001 P/N ABC123
0002 P/N DEF456 D002-0002 P/N DEF456
0003 P/N GHI789 D002-0003 P/N GHI789
0004 Installation & Testing D002-0004 Installation & Testing
Cont…

2.i, Continued…
TLUSA-20-P-0909 D003
0001 Labor D003-0001 Labor
0002 Travel D003-0002 Travel
0003 ODC D003-0003 ODC
0004 Subcontractors D003-0004 Subcontractors
Cont…

Incurred Cost Proposal
• Schedule H – Summary of costs by job.
• Schedule I – Reconciliation of costs incurred to amounts invoices
(over/under).
• Schedule K – Hours and dollars by labor category for T&M contracts.

Room Poll
DO and TO stand for-
A. Direct order and task order.
B. Delivery order and task order.
C. Direct order and time order.
D. None of the above.

Recommended Use of Jobs
2.a Proper segregation of direct costs from indirect costs.
• Create jobs for both direct and indirect work.
• Consistency in data entry and easier for end users.
• Allows you to run exception reports for mismatch of job type and GL
code.
Cont…

Recommended Use of Jobs, Continued…
2.a Continued…
Cont…
Account Direct Fringe Overhead G&A B&P IRAD
1xxx Opt
2xxx Opt
3xxx Opt
4xxx
5xxx
6xxx
7xxx
8xxx
9xxx

Recommended Use of Jobs
2.J Segregation of preproduction costs from production costs.
• Easier to segregate costs by creating separate projects.
Cont…

Room Poll
Proper segregation of direct costs from indirect costs-
A. Creates jobs for both direct and indirect work.
B. Consistency in data entry and easier for end users.
C. Saves time.
D. Both A & B.

Advantages of Job Costing
Capture costs by job/task, contract/CLIN, project/phase, item/module.
Perform analysis by:
• Contract type (cost, T&M, fixed price)
• Project/Phase
• Product/Service
Cont…

Advantages of Job Costing, Continued…
Easily reconcile job cost ledger to general ledger.
• Sum of the parts must equal the whole.
• Required for Schedule G of the Incurred Cost Proposal (ICP)
Cont…

Cont…
Track profitability.
• Budget vs. actual.

Monitor over/under billing.
• Compare actual to provisional billing/indirect rates.
• Compare total costs to total revenue.

Room Poll
Which is an advantage of job costing?
A. Track profitability.
B. Ensure accurate invoices.
C. Maximize billable expenses.
D. All the above.

Elements of a Job Cost Report
• Revenue/Invoiced Amounts
• Direct Cost Elements
• Units & Rates
• Hours & Dollars
• Applied Indirect Rates
• Budget vs Actual vs Billing
• Current, Year to Date (YTD), & Inception to Date (ITD)
Cont…

Elements of a Job Cost Report, Continued…

Room Poll
One element of a job cost report is applied indirect rates-
A. True
B. False

Best Practices for
Job Costing

Best Practices
Use jobs for direct and indirect work.
Define a job nomenclature:
• Dxxx Direct
• Cxxx Cost-Type
• Txxx T&M
• Fxxx FP
• Kxxx At-Risk
• Fxxx Fringe*
• Vxxx Overhead*
Cont…
• Gxxx G&A*
• Rxxx IRAD
• Separate project for each effort
• Charter for each project
• Bxxx B&P*
• Task for each proposal
*The projects should be reset each year.

Best Practices, Continued…
Define a work breakdown structure (WBS) for cost elements.
• 10 Labor
• 20 Material
• 30 Travel
• 40 ODC
• 50 Subcontractor
• 80 Sales Order
• Purchase Order
Cont…

Allow only appropriate expense types/cost elements per task.
For example: Travel costs and GL accounts should only be connected to
travel lines.
Cont…

Allow only employees assigned to a job to charge to the job.
Cont…

Ensure dates on job align with period of performance (POP) of contract.
Cont…

Reconcile job cost ledger to general ledger every month.
Cont…

Have project manager review & approve job status report before
invoicing client.

Room Poll
The job cost ledger should be reconciled with the general ledger
every-
A. Day.
B. Week.
C. Month.
D. Year.

Job Costing for Profitability
Job costing, a direct requirement for the SF
1408, involves the gathering of the costs of
materials, labor, and overhead associated
with a particular job. It is needed for the
incurred cost proposal and provides an
excellent tool for tracing specific costs to
individual jobs and scrutinizing them to
determine if the costs can be reduced in
future jobs, and vice versa, to see if any
excess costs incurred can in turn be billed
to a customer.

Room Poll
Given what you learned, what’s your comfort level on job
costing?
A. I’ve got it now!
B. I’m a little fuzzy, but I think I can manage.
C. I’m still unclear of how to job cost for profitability.
D. I don’t get it and need help with job costing.

Connect
with us
Download the presentation
Left Brain
Professionals Inc.
@LeftBrainPro
Email us
Support@LeftBrainPro.com
@LeftBrainPro
Left Brain Pro
LeftBrainPro
www.LeftBrainPro.com/presentations

For information on our upcoming webinars, visit us at
LeftBrainPro.com/events for more details.

Thanks for attending today’s event!
Encoursa is committed to helping accounting and finance
professionals develop personally and professionally through
continuing education.
Join us for Left Brain Professionals’ next event
on December 1st!
Self-Study Courses by Robert Jones:
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https://encoursa.com/
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encoursa/
Please take the course survey following
the program.You can log in to your
Encoursa user account to access your
CPE certificate, the recording, and
materials.
Laying the Foundation for GovCon Accounting
Fundamentals of Indirect Rates
Advanced Indirect Rates

Encoursa Webinar: GovCon Job Costing

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Encoursa Webinar: GovCon Job Costing