Monday, March 23, 2020
Laurel Glass & Mirror Inc. Case Study
Company: Laurel Glass & Mirror Inc.
History: Laurel Glass and Mirror Company established in the heart of Main Street historic Laurel, Maryland in 1983. For the past 35 years, the company has been family-owned and operated and is in its third generation of management. Old-fashioned customer service and friendliness have been the heart of company core values you feel when you walk through the door and are greeted by the family English bulldog. The company provides commercial and residential glass and mirror products, custom cuts, shower doors, storefronts, and many other products.
Business Challenge: The company was using QuickBooks Enterprise to manage their business, but were discouraged by the lack of information populating job cost reports to help it determine profitability of commercial and residential projects.
The available job costing reports showed zero costs per job. Raw materials for their custom cut glass jobs were purchased in various large sheet sizes, but sold by square foot. Those costs were not showing in any job costing reports. Annual journal entries made by their accountant to adjust purchases and inventory assets to the end of year inventory count did not provide sufficient real-time data to determine whether or not jobs were profitable, and worse — were not allocated to the jobs completed.
Additionally, labor costs were a large component of their overall production costs and were not applied to the jobs. Paper timecards for 19 employees were hand-entered and weekly payroll was a chore that took almost a whole day including journal entries.
The company reached out to Turn Key Office for help.
Solution : Based on the client’s goals, we made a conversion to QuickBooks assisted payroll with job costing. We implemented an off-the shelf software product that provides electronic time keeping that is integrated with QuickBooks timesheets and payroll.
Now, employees use their smartphones to simply clock in and out to the work orders. Payroll and timekeeping become a breeze taking only a few minutes. As an added benefit, labor costs are allocated to the jobs, there are no journal entries and no more paper timesheets!
Next, Turn Key Office helped explain how job costing and inventory management goals can be achieved by utilizing units of measure to track sheets of raw materials purchased by the “sheet” and consumed by the square foot. We implemented embedded conversions to the various sheet sizes procured and mapped them to square feet for accurate inventory reports.
We also helped educate the team on the proper use of inventory and non-inventory item types and how job costing is accomplished with each type of item. We made choices of the effective use of each item type based on the type of sales transactions, set up the items appropriately, and made adjustments to represent on-hand quantities.
Conclusion : Now, the books accurately reflect the inventory on hand. And, the management team has the real-time job costing reports it needs to help identify and grow the profitable parts of the business, and they spend much less time on bookkeeping tasks!