There are numerous problems in reporting on projects attributed to incorrect or missing cost rates of items billed to those projects. All transactions in any business share one big similarity - they all have costs associated with them. In order to truly understand the health and success of your business, it is important to keep the costs in mind. When setting up your Core account, be sure to define the average cost rate for each employee (along with activity and expense items) as this will help you determine the cost of doing business. This is essential for job costing and general accounting.
Regarding the cost rates of expenses, while working for your clients, you might have to hire a consultant to help complete the projects. The time and expenses spent by the consultant becomes an expense to you on the projects that can be billed to the client. By setting up this Consulting item as an expense and keeping your cost rates up to date in Core, you can calculate your bottom line more accurately. Check out this illustration for details.