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Setting up cost codes involves the following, in the order displayed:

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Dividing a job into segments

Large projects, activities, and organizations are often divided into smaller parts to facilitate their management. The following diagram shows how a job can be broken into cost elements and cost code segments (phases, steps, details, and components).

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Setting up cost element names

Cost elements are categories of costs on a typical job and are used to group similar costs or cost codes. Labor, Material, Equipment, Subcontractor, and Other serve as default cost elements. Four user-defined cost elements are also available.

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1. Choose Microsoft Dynamics GP > Tools > Setup > Job Cost > Cost Code Setup > Cost Elements.

2. You can change the names of the default and user-defined cost element descriptions. 

   Note
   If you plan to modify any Job Cost reports using Report Writer, you must use the default name in the Internal Name column.

   
   

3. To print the Cost Element Setup List report, choose File > Print or choose the printer button.
4. Choose Save.

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Renaming cost code segments

A segment represents a unique category of information, such as a business location, department, or account type. Default names for cost code segments are provided in the Cost Codes Segment Setup window. You can either save the default names or rename the segments to suit your needs.

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1. Choose Microsoft Dynamics GP > Tools > Setup > Job Cost > Cost Code Setup > Cost Code Segments.
2. You can enter a new name for each cost code segment. For example, if you create cost codes and use the second segment to differentiate the cost codes by warehouse location, enter "location" instead of "phase."
3. Choose Save.
4. To print the Cost Code Segments List report, reopen the Cost Code Segment Setup window, and choose File > Print or choose the printer button.

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Setting up the cost code format

The cost code format can contain one to four segments. Each segment can contain up to five alphanumeric characters. Each segment of a cost code represents a unique phase, step, detail, or component level of a job.

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If you want to change the cost code format after saving, you must contact Key2Act WennSoft Support. We do not recommend or support changing the cost code format after costs post in Job Cost.

Defining production measures

Production measures are used to track the number of units estimated or produced for a selected cost code. Typical measures are Hours and Each.

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1. Choose Microsoft Dynamics GP > Tools > Setup > Job Cost > Cost Code Setup > Measures.
2. Enter a Measure Code and Description.
3. Choose Save.
4. To print the Production Measure Codes report, choose File > Print or choose the printer button.

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Saving predefined profit types

Profit types define billing amount calculations for cost codes. When you assign a profit type to a cost code, billing amounts on all posted job transactions for this cost code use the calculation method associated with the assigned profit type. If you choose Cost Plus or Cost Plus NTE as a job's contract type, billing amounts calculate automatically as costs are posted to the job. These amounts are based on the profit types on the Profit Type Setup window.

1. Choose Microsoft Dynamics GP > Tools > Setup > Job Cost > Cost Code Setup > Profit Types.

2. Choose Save. 

   Note
   You must open and save the Profit Type Setup window, even though you cannot change the defaults.

   
   

3. To print the Profit Type Setup List report, reopen the Profit Type Setup window, and choose File > Print or choose the printer button.

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Description of profit types

• 1 - Non-billable
  Billing amount = 0.00
  Use this profit type when the cost amounts posted to the cost code for the job should not be billed to the customer, or if you want to track costs but not bill for costs.
• 2 - None
  Billing amount = cost amount
  Use this profit type when the cost amount charged to the cost code for the job will become the billable amount. This is the default profit type for all cost codes on Fixed Amount contract jobs.
• 3 - Percent margin
  Billing amount = cost / (1 - percent margin)
  Use this profit type when the billing amount is based on a desired profit margin for the cost code. This margin is assigned as the profit amount for the cost code. For example, if a unit's actual cost is $100, and you choose a percent margin of 24 percent, the billing amount is $131.58. (The calculation is: 100 / (1 - 0.24) = 131.58).
• 4 - Percent of cost
  Billing amount = cost + (cost x percent of cost)
  Use this profit type when the markup amount is calculated as a percentage of the actual cost for the cost code assigned to the job. This markup percent is assigned as the profit amount to the cost code. For example, if the actual cost for the cost code is $100, and you choose a percent of cost of 10 percent, the billing amount is $110.
• 5 - Per unit amount
  Billing amount = cost + (number of units x profit per unit)
  Use this profit type when the profit amount is calculated as a dollar amount per unit for the cost code. For example, if the cost of each unit is $10, and 10 units are used with a profit amount of $5 per unit, the billing amount is $150. (Cost is 10 x $10 = $100 and billing amount is $100 + ($10 x $5) = $150.)
• 6 - Total dollar amount
  Billing amount = cost + profit amount
  Use this profit type when the profit amount for the cost code equals a total dollar amount, regardless of the cost or number of units used. For example, enter a profit amount of $100 for the cost code. The amount billed for the cost code is cost plus $100.
• 7 - Flat rate per cost code
  Use this profit type when the billing amount for the cost code equals a total dollar amount, regardless of the cost or number of units used. The total amount billed for the cost code is entered as the profit amount for the cost code. For example, enter $10 as the total amount billed for the cost code. If your cost is $7, your profit is $3. If your cost is $8.50, your profit is $1.50.
• 8 - Flat rate per unit
  Use this profit type when the cost code is billed as a flat amount per unit regardless of the cost of the unit. The amount billed per unit for the cost code is entered as the profit amount for the cost code. For example, if you enter a billable amount of $25 for a labor cost code, you bill $25 per unit. If your cost per unit is $10, your profit per unit is $15. If your cost per unit is $22.50, your profit per unit is $2.50.
• 9 - Service labor rate group
  If you are also using Service Management, use this profit type to bill job customers for labor-only cost codes and establish billing amounts for labor transactions. Labor rates can be set up to reflect different rates for different pay codes. You can create labor rates by position or by department. This profit type is unavailable if you do not have the Service Management Labor Rates module. Contact Key2Act WennSoft Sales if you would like to purchase this module.

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Setting up master cost codes

Since the jobs a company performs are usually similar, many of the details of the job structure (including some cost codes) will be common to many jobs. Master cost codes are commonly used codes that can be easily assigned to jobs without reentering information.

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