Sub Specialty Contractor

How to do you handle warranty period costs?  I would like to close the project as soon as done, but current company keeps them as inactive and don't realize the profit until warranty period is over.  Wanted to see how others handle it.  Create a project just for the warranty?  Or reopen the project if there are warranty costs?

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Ruth Zankich
Controller
Next Level Energy Management Systems
Santa Fe Springs CA
(213) 660-8582
rzankich@nextlevelems.com
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Ruth, we handle warranty costs exactly as Kevin stated. We close the original job once all outstanding CORs have been resolved. 

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John Bieber CCIFP, CPA
Chief Financial Officer
National Glass & Metal Co., Inc.
Horsham PA
(267) 532-1780
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Original Message:
Sent: 04-20-2024 06:16
From: Kevin O'Shea
Subject: Warranty Period Costs

I open a job each year called warranty work (2024WW) and any warranty work hours or material is charged to the phase that was the job number.  If anything is billable, I open a new job number.

 

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We close the job like you mention but if there are warranty costs, and the job is still on the wip for the year, we open it back up just for the warranty costs to hit. Then quickly close it again. We have a “closed job warranty work” job that we post the costs to for those jobs no longer on the wip. That way we don’t have to bring that job back around.