Overview:
There may be certain situations where additional cost is incurred on the job, and cash is later received to offset this additional/unexpected cost. This is most commonly known in the construction industry as a back charge. Back charges most commonly take place when a Subcontractor or Vendor makes a mistake and causes additional expenditures on the job site where there shouldn't have been. Common examples include:
- Subcontractor causes damage to the Job Site
- Subcontractor/Supplier provides defective materials
- Subcontractor delivers defective work
- Additional clean up costs needed due to work of Subcontractor
The video below walks through the process of receiving cash through the Cash Receipts Entry window, and offsetting that cash received against job or work order cost to reduce that cost
Benefits:
- Quickly receive cash from a subcontractor/vendor and reduce job cost
Roles:
- Accounts Receivable Clerk
- Accounts Receivable Manager
Additional Content
- N/A
Location:
- Billing & Accounts Receivable > Cash Receipts > Cash Receipt Entry
Video: