Contractor Set-Up

[Gavandria]

I am using an independent contrator for some occasional work. They are paid by the item that they produce, not by hours worked. How do I set them up in QB? Are they a vendor? What account do I use to record the work they do and the payments made? I also need to account for the amount I pay for each item in my final cost of the product. I am using Number Cruncher Work Orders to create a Bill of Materials and Work Order so I would need an item for the amount paid for each piece produced by the contractor.
Thanks,
Ria Waugh
Gavandria
www.gavandria.com

[QBPaul]

Ria,

Let's take this a step at a time. A contractor is considered a sub-contractor is QuickBooks. When you go to the "Vendor" list, you can enter new or edit. Go to the additional information tab and you will have a drop down list for type. Just click "subcontractor" and that part is set up.

Next question, go to the help index and type in "subcontractor" and click on the "paying". I believe this information will walk you through. It will also help you set-up to make sure you can generate the 1099's at the end of the year. If you need specific accounts, create a "Contractors" expense account to track your pay-out. If you were to hold paymeht for a time, create a current liability account named "Contractors Payable".

Your final question about the cost tracking, I would need a little more information about what you want to see. It would be helpful to know what QuickBooks software you are using.

Hope I helped,

Paul

[Gavandria]

Thanks Paul !

[Gavandria]

Paul -
In regards to the last part. I am using Quickbooks Pro 2002 and Number Cruncher Work Orders which integrates with QB to track raw materials, create Bill of Materials and work orders.
Basically what I do for each item I produce is set up an inventroy item in QB then go to Number Cruncher and create a bill of materials by selecting the the items I used in the product and the quantity of each. Then I create the work order to deduct those items form my QB inventory and add the finished productback in QB inventory.
I know I would need to set up the contractor expense as an inventory item (so I have access to it for creating a bill of materials), but I'm not really sure how I can get it to hit the contractor expense account I set up so I can pay the contractor. Does this make any sense?
Thanks, Ria

[QBPaul]

Ria,

I think I followed you.

To finish this up, when you pay the contractor, let's try this.

First, go to the help index and type in "subcontractor, paying". This will give you a guide line.

Under "vendors", add or edit the contractor. Click the additional info tab and make sure that the issue 1099 tab is checked.

Then, create an expense account named how you chose. In the tax line drop-down, select "Sch. C job, cost of goods".

When you cut the check, just click the expense tab and find the expense account you are channeling to.

The reason I asked what version you are running is for the reason that if you had 2003 Premier, you could possible get rid of the 3rd party software, since Premier has the capability to do what is called "build assembles" and it could all be handled there.

I hope I helped,

Paul

PS. I looked at your web site last night just to get an idea of what you do. It helps to know a little about the business.

[Gavandria]

thanks again Paul - I will give all this a try!
Ria