Using Cost Accounts
In Goldenseal accounting software, use Cost accounts for any person or business to whom you pay money.
HINT-- You might think of Cost accounts as being the second half of job cost accounting!
When you use job cost accounting, almost every expense comes from a cost account, and is applied against some sort of job.
There are five basic classes of cost accounts:
Use Employee accounts for any person who does work on behalf of your business, whether they are paid, a volunteer, or an owner. You will then track their time in Labor Hours records, which provide cost data for job costing, payroll and "cost plus" project billing.
Use Equipment accounts for vehicles and other equipment that has significant running costs. Equipment accounts are unusual, since they can be considered as an Asset account on your balance sheet, as a Cost account when used on a project or other job, and as a Job account when you spend money on supplies or maintenance to run the equipment. You will track equipment time in Equipment Hours records.
HINT-- If you need to file a 1099 form in the US for someone, consider them as a subcontractor.
Use Other Cost accounts for any person, business or agency that does not fit into one of the other cost classes.
HINT-- Click this link for more details on when to use each type of vendor cost account.