USA Job costing Line of Credit Interest to multiple jobs

[phillrachel]

Hello. We are a homebuilder and we have a line of credit we use to finance the build of new homes. Each month we pay interest on our line of credit which has a variable rate. We have multiple projects using the one line of credit. How to I take the monthly interest expense and divide it between each job to job cost the interest expense to that job. We use Sage Contractor 100 for accounting software.

 

[bklynboy]

Why not base on how much the LOC was used for each home? For instance if you have drawn 100 and home A took 25 and home B 75 - ratio the interest 25% to home A.

 

[John Baker]

Is your interest expense based on the lump sum outstanding at the end of a cutoff period?
What is the nature of your going into your line-of-credit?
- in other words, do you have a specific criteria for using a line-of-credit, or is it used only when needed?
Do you have a cash flow format, used in conjunction with your relationships of receivables and payables?
- prior to building, you use a bill of materials and labor specific for each build, then determine "what if's"
based on market conditions, credit worthiness of potential suppliers, contractors, even buyers and so forth?