Build Labor Account Bookkeeping Question

by Kathy
(La Mesa, CA USA)

Labor

Labor

Our office moved, we paid for the build out, what account should I put the labor for the build out?

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Aug 24, 2023
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starstarstarstarstar 		Office Labor Costs
by: BB

When your office moves and you pay for the build-out, the labor costs associated with the build-out should typically be capitalized and recorded in a fixed asset account, such as "Leasehold Improvements." This recognizes that the labor has contributed to a tangible asset that will provide benefits to the company over time.

The accounting entry might look like this:

Debit Leasehold Improvements
Credit Cash/Bank
The leasehold improvements would then be depreciated over the useful life of the improvements or the remaining term of the lease, whichever is shorter.

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Donated Labor

How do I track donated labor?

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Aug 24, 2023
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starstarstarstarstar 		Donated Labor Costs
by: BB

Donated labor, also known as volunteer labor, can be tracked in a few different ways depending on the context and needs of your organization. If your organization is a non-profit and you wish to recognize the value of the donated labor for grant reporting or other purposes, you may need to follow specific accounting guidelines.

Here's a general approach:

Identify the Nature of Labor: Determine the type of work being performed and establish a reasonable fair market value for that labor.

Create a Tracking System: Utilize spreadsheets, specialized software, or other tools to record details of the labor, such as volunteer names, hours worked, dates, tasks performed, and fair market value rate.

Document Contributions: Keep any necessary documentation, including agreements or acknowledgments, especially if you need to comply with specific legal or regulatory requirements.

Journal Entry (Optional): Some organizations may want to make a journal entry recognizing the donated labor. This could be a debit to an expense account (e.g., "Donated Services Expense") and a credit to a revenue or contribution account (e.g., "Contributed Services Revenue"). This entry may vary based on accounting guidelines, especially for non-profit organizations.

Report as Needed: Include donated labor in reports as required by stakeholders, grantors, or regulatory bodies.

Compliance with Laws and Regulations: Make sure to consult with an accounting professional or legal advisor to ensure compliance with any applicable laws, accounting standards, or regulations specific to your jurisdiction.

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Temp Agency Labor

by Fran
(Utah)

I need to know where to enter temp labor in my QuickBooks. Is it an expense or COGS or what? I think I've been putting it in the wrong place. I enter as a bill with Vendor. Which accounts apply? Thanks

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Aug 24, 2023
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starstarstarstarstar 		Temporary Labor
by: BB

Entering temporary labor in QuickBooks can vary based on the nature of the labor and how it relates to your business activities.

If the Temp Labor is Directly Related to Producing or Selling Goods (Cost of Goods Sold - COGS): If the temporary labor is directly associated with manufacturing or selling products, you may want to enter it as a COGS. In this case, you could create or select an existing account under COGS such as "Temporary Labor - COGS" and enter the bill there.

If the Temp Labor is Related to General Business Operations (Expense): If the labor is used for general business purposes like administrative tasks or other non-production-related activities, you may classify it as an expense. Create or select an account under your Expense category like "Temporary Labor - Expense."

Consult with a Professional if Needed: If you're uncertain about the correct categorization, it may be beneficial to consult with an accounting professional or tax advisor who understands your specific business situation.

Here's a general step-by-step guide:

Go to the "Enter Bills" section.
Select the Vendor.
Choose either the Expense tab or the Items tab, depending on whether the labor is a COGS or general expense.
Select the appropriate account (either under COGS or Expenses).
Enter the amount and any other necessary details.
Save and close.

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Unpaid Labor

What are the accounting entries for donated labor that was provided to help set up your business?

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Aug 24, 2023
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starstarstarstarstar 		Donated Labor Bookkeeping Entries
by: BB

Donated labor refers to services provided for free or without charge. In accounting, this can be a bit tricky to record since there is no actual monetary transaction. Here's a general way you might handle it:

Debit an Expense Account: You could create an expense account such as "Donated Labor" or "Contributed Services" and debit this account for the fair market value of the services provided.

Credit an Equity Account or Income Account: You could credit an equity account like "Owner's Contributions" or "Contributed Capital" if the labor is considered a contribution from an owner or member. Alternatively, you could credit an income account like "Donated Services Income" to reflect the value as income to the business.

Add a Note to Financial Statements: It may also be advisable to add a note to the financial statements explaining the nature of the donated labor and the method used to value it.

The actual treatment can vary based on accounting standards, business structure, and the specific nature of the donated labor, so consulting with a professional accountant may be beneficial.

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