There are a few options on how to manage Xero subscriptions against fixed price jobs in XPM. We have detailed the options below with the benefits or limitations of each option.
It's important that we only add these costs for the Fixed Price Agreements that have the Xero fee bundled into the invoices. If we are billing the Xero subscription separate to the accounting fee, we do not need to include the invoice on the jobs. You can find our guide on how to manage Xero subscriptions invoiced separately from accounting fees here.
Option 1: On the job template as an actual cost for the full year: This is possibly the easiest, but will cause a massive spike in WIP at the start of the year.
Option 2: On the job template as an estimated cost for full year: With this method, you would check the cost item as an 'actual cost' as part of the process for closing the job out. The benefit of this is the WIP will spike, and be written off in the same day, so you won't get a massive spike in WIP first month of the year that is carried until the jobs are completed (as per above)
Option 3: CSV import for the full 12 months of subs at the end of the year: The downside of this is we may be closing jobs out before the end of the year and when we review their profitability they won't include the Xero subs. So not an ideal scenario.
Option 4: CSV import for full 12 months of subs at the start of the year: The downside of this is we will have a massive spike in WIP, as per the first option.
Option 5: Monthly CSV import: This could work well, but it's admin heavy, and you may be closing jobs out before they have all their monthly subscriptions loaded.
Option 4: CSV import for full 12 months of subs at the start of the year: The downside of this is we will have a massive spike in WIP, as per the first option.
Option 5: Monthly CSV import: This could work well, but it's admin heavy, and you may be closing jobs out before they have all their monthly subscriptions loaded.
From a Link Reporting perspective, option 2 works well because we will be apportioning the job budget you enter (in the budget field of the job), firstly to any disbursements (estimated or actual), then across the tasks relative to their estimated hours and billable rates.
Let's look at an example:
$5,000 job budget. $720 of Xero disbursements that have been loaded as an estimated cost. So the budget will first apportion $720 against Xero subscription disbursement. We now have $4,280 of budget remaining to apportion to the tasks. We have Annual Accounts 20 hours, and GST 10 hours. Let's say a $200 billable rate for annual accounts, and $150 for GST. $200 x 20 = $4,000. $150 x 10 = $1,500. So $5,500. We take the 4,000 / 5,500 to get 0.72 and 4,000 / 5,500 to get 0.28. So the budget for annual accounts is $4,280 x 0.72 = $3,112, and the budget for GST is $4,280 x 0.28 = $1,167. There a lot of calculations there, but it works really well. So to get the $720 first apportioned to the Xero subs, we need to have the estimated cost on the job, which is why having the estimated cost on the job template is a good idea.
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