MYOB Account right does not process job costing properly in terms of standard accounting principles as has been described in all accounting text books which means that the profit and loss that is bei...
Clive,
The real problem with MYOB is that it is NOT doing the basics in the first place. There is an inventory Module in MYOB where the general ledger settings are a balance sheet account for the asset of inventory and a Sales Account and a Cost of sales when you sell an item out of inventory.
Work in progress ia also a form of inventory and the standard accounting entries are to charge Reveue and Costs for a job to work in progress and then on completion of the job, those revenues and costs are transferred to the relevant Sales and Cost of Sales account for that job. That is the basics as far as Jobs costing is concerned and these basics are not a recent innovation nor is it my idea. The concept of work in progress as a balance sheet hItem until a job is completed (determined by whatever the copany defines as completion) is entrenched in Australian Accounting Standards as evidenced in the Annual reports of companies like AV Jennings and there is no reason why software provided by MYOBS and others cannot also follow these principle as they do with Inventory. MYOB and others are able to set up their systems to handle inventory and to do the same for Job Costing can't be that difficult. MYOB will need a program to process completed jobs but that can't be that difficult either.
The benefits in terms of better job profitability reporting and and more relevant P&L reporting for busineeses that are jobbers just cannot be measured. I have worked in many businesses who were jobbers and had systems that were supposed to track costs and had management capabilities but had no integity and the reporting out of these systems could not be relied on by management but few people really understood why this was so.
It is by adopting sound processes incorporating the basic principles I have outlined that will enable management to have P&L reports that make sense and will make sense to them in inderstanding the finances of the business.
You speak about NFPs and the way theu use job costing. If they work on grants and allocating revenue and costs,of those grants, it is no differnt from a jobbing businees and I am sure that they too would welcome the concepts that I have explained and the better reporting that is going to eventuate once MYOB has embraced the cconcepts of work in progress as an asset and the charging to the P&L on a completion basis Wikipedia has an article on Job costing and in it there is a criticsm of software companies that appear unable to realize the bebenefis that can come about throuh the use of the computer. I still cannot belive in 2016 that we are having this debate about the mechanics of Job Costing
Michael Macleod