As you say, not all contracts will allow you to charge home office expense to the job. Most of ours do not. We carry our Project Managers and Assistant Project Managers in overhead. When we can charge them directly to the job, we do so. That's decided job by job and the individual is directed to report time accordingly. We use AboutTime for time reporting. We have some individuals who are not on it, and on payroll day, we simply charge X hours of their time to a job. That's how we charge Executive time when we're able to charge it to a job.
Small tools and equipment rentals are budgeted in each job and charged to it. I've never found this to be a significant expense. If the contract is some kind of cost plus, we make sure these costs are coded outside general conditions, to the exact line item for which they are incurred.
There are some other home office expenses such as company trucks, maintenance which I take each month and allocate to all jobs pro-rata, based on that month's cost. I also charge most of my insurance program to the jobs. Since my General Liability is paid based on billings, I allocate the other policies based on each project's monthly billings.
My basic goal in all of this is to charge each job with as much cost as it should have. I look at each GL account and ask myself, "if I didn't have any jobs, would I still have this expense?" If the answer is "no" then I'm going to figure out how to charge the job for it.
Timothy J. Mickunas, CPA, CCIFP
Chief Financial Officer
Office: (956) 686-9573
Address: P.O. Box 3455, McAllen, TX 78502-3455
An Employee-Owned Company
Home of the Connection Café.
100 Village Blvd., Suite 200, Princeton, NJ 08540Phone: 609-452-8000 | 888-421-9996 | Fax: 609-452-0474 | email@example.com