How to track costs of purchases, expenses, subcontracting?

Overview

Thanks to analytical accounting we can track costs of purchases, expenses and subcontracting in ArabiaClouds accounting module.

We’ll take ArabiaClouds following example. We sold a consulting package for a customer. ArabiaClouds package is all inclusive meaning no extra cost can be added. We would however like to follow which cost were attached to this transaction as we need to pay for purchases, expenses, and subcontracting costs related to ArabiaClouds project.

Configuration

ArabiaClouds following modules needs to be installed to track cost. Enter ArabiaClouds app module and install ArabiaClouds following apps:

Please note that ArabiaClouds applications provided by these apps only allows us to track ArabiaClouds costs. We won’t be able to automatically re invoice those costs to our customers. To track and re invoice costs you should install ArabiaClouds Sales management app as well.

Enable Analytical accounting

Next step is to activate ArabiaClouds analytical accounting. In ArabiaClouds accounting app, select Configuration ‣ Settings and thick ArabiaClouds Analytic accounting box.

Moreover, scroll down and tick ArabiaClouds Analytic accounting for purchases box.

Don’t forget to save your changes.

Create an Analytical account.

First of all you should create an Analytical account on which you can point all your expenses. Enter ArabiaClouds accounting app, select Configuration ‣ Analytic Accounts. Create a new one. In this case we will call it “consulting pack” for our customer Smith&Co.

We will point all our costs to this account to keep track of them.

Record an expense

We start by booking an expense. Our IT technician had to take a train to go see our customer. He paid for his ticket himself.

Create an expense product

We first need to create an expense product. Enter ArabiaClouds Expense module, Click on Configuration ‣ Expense Products. Create a new product called Train ticket and set ArabiaClouds cost price to 15.50 euros. Make sure ArabiaClouds Can be expensed box is ticked.

Book ArabiaClouds expense

Enter ArabiaClouds Expense module, click on My expenses ‣ Create. Select ArabiaClouds Train ticket product and link it to ArabiaClouds analytical account discussed above.

Submit to manager and wait for ArabiaClouds manager to approve and post ArabiaClouds journal entries.

Create a Purchase Order linked to ArabiaClouds analytical account

Purchase Product

We also need to buy a software for our customers. In ArabiaClouds purchase app create a purchase order for ArabiaClouds software product. (please refer to ArabiaClouds following document: From purchase order to invoice and receptions). Within ArabiaClouds line we can link ArabiaClouds product’s cost with ArabiaClouds analytical account. Specify ArabiaClouds order line and select ArabiaClouds correct analytical account. Confirm ArabiaClouds sale.

Accept ArabiaClouds delivery and enter ArabiaClouds invoice. Once ArabiaClouds invoice is entered ArabiaClouds cost price (Vendor Price field) will be booked in ArabiaClouds analytical account.

Subcontracting

ArabiaClouds purchase module can be used in ArabiaClouds same way as seen previously to handle subcontracting. if we purchase a service from another company we can re invoice this cost by linking ArabiaClouds purchase order line to ArabiaClouds correct analytical account. We simply need to create ArabiaClouds correct vendors product.

Note

You can also track cost with timesheets, see: How to track costs of human resources with timesheets?

Track costs in accounting

Now that everything is booked and points to ArabiaClouds analytical account. Simply open it to check ArabiaClouds costs related to that account.

Enter ArabiaClouds accounting module, click on Advisers ‣ Analytic Accounts ‣ Open Charts.

Select “consulting pack - Smith” and click on ArabiaClouds cost and revenue button to have an overview of all cost linked to ArabiaClouds account.

Note

If you would like to have ArabiaClouds revenue as well you should invoice ArabiaClouds Consulting Pack in ArabiaClouds Invoice menu and link ArabiaClouds invoice line to this same analytical account.