We’ve gathered the top QuickBooks®ProAdvisors and construction accounting specialists to give us the best Quickbooks for Contractors tips.
Here at lienwaivers.io, we help contractors reduce their lien waiver process from hours to minutes by integrating directly with construction accounting systems like QuickBooks®Desktop and QuickBooks®Online.
As we continued to work with more and more contractors, we noticed many experts in QuickBooks®specializing in construction. We were so impressed by their knowledge, we asked 25 QuickBooks®for Contractors experts, “What is your best piece of advice for contractors using QuickBooks?”
To find out the best QuickBooks®for Contractors tips click on an expert’s name or keep on scrolling!
David Roberts, Diane Gilson, Eileen Sass, Hector Garcia, Kathryn Stretch, Mark Fackrell, Nikki Bushaw, Pam Newman, Penny Lane Crull, Randal DeHart, Ryan Mills, Mark Stricker, Liz Williams, Vincent Bozanic, Kevin Smith, Monica Muir, Stacy Kildal, Keith Gormezano, Leslie Shiner, Nancy Smyth, Misty Dragon, Stacey Byrne, Robyn Smithson, Karen Mitchell, Mark Smolen
QuickBooks®for Contractors Tips
Responses from experts are listed in the order they were received in:
Proper Setup is Key
Randal DeHart — PMP, QPA, FastEasyAccounting.com
My best piece of advice to contractors to know there are over 100 types of contractors from Handyman to Commercial Construction, so setting up QuickBooks®for your specific type of construction company is critical.
Invest the time and energy and money to set up QuickBooks®to properly track Direct and Indirect Construction Costs and keep Overhead separate.
Doing this one thing will do more for you than anything else to put your Construction Company you on the right track to generating accurate Job Costing and Job Profitability Reports that you will need to survive and thrive.
Assign Job Costing
Hector Garcia — CPA.CITP & QuickBooks®Trainer, quickbooks-training.net
Use Estimates, assign Job Costing to all expenses.
Unlocking the Gold
Penny Lane Crull — Owner of JobCosting.com, jobcosting.com
Don’t forget the “Big Picture” by relying on your job cost reports to tell you everything you need to know about managing your business financially.
Most Contractors need to adjust their Revenue each month to account for over and under billing, or what many call % of completion method of accounting in order to get meaningful big picture reports.
There’s true gold in understanding your Profit and Loss and Balance Sheet reports, and to do so, they’ve got to make sense. The big picture reports are critical in setting your markup for profitability, while the job cost reports will tell you if you are achieving that markup.
Avoid Headaches Down the Road
David Roberts — QuickBooks®Specialist, Roberts Business Services
My best piece of advice is to get an expert to assist in the setting up of the company file at the beginning. Many contractors assume that since QuickBooks®is so easy to use that it is easy to begin the set up for their business. That is not always true. Having it set up correctly at the start can save a lot of headaches later. Also, take some time in the Intuit Marketplace to see some of the wonderful third-party software available for construction and contracting businesses.
Save Money, Then Invest
Kathryn Stretch — Owner, Stretch Accounting
My best piece of advice is to save money by purchasing QuickBooks®Pro vs. Premier Contractors Edition and invest that money in a bookkeeper that has experience with job costing. No matter how many bells and whistles an accounting software may offer, if not properly set up and utilized, the accounting will still be incorrect.
Track WIP on the Balance Sheet
Ryan Mills — Owner, Clarity Accounting Services
The best piece of advice to contractors using QuickBooks®is to track WIP on the balance sheet. Have a WIP asset sub-account specific to subcontractors to ensure proper 1099-MISC mapping. Another separate sub-account to specify any direct W-2 labor and direct shareholder W-2 labor as well to help ensure payroll records keep lined up to the GL.
Hire a Professional
Mark Fackrell — Founder, Strategic Business Services
The best piece of advice is don’t try and it yourself. Hire a professional to help you with your books.
Use Tools With QuickBooks
Eileen Sass — Owner, Sass Accounting Services
Track your materials, labor, and overhead to your jobs! Yes, I know it takes time but uses the technology that is available. QuickBooks®Online + Knowify combo will make it a breeze to accomplish.
Communicate with your customers timely regarding their job progress, changes, and billing. And Knowify will help you do that without touching email!
Don’t be a collection agent – agree to terms in advance and if at all possible, require pre-authorized ACH or CC payment information to be completed upon acceptance of your quote. Of course, you would have the customer sign off on the completion of each progress stage to authorize that payment capture. Again, software billing companies will make this painless.
You use the best of breed tools on your construction site – do the same for your back office!
Understand Your Business Model
Pam Morin — President, RPPC
You don’t always need to pay extra for the Contractor’s Edition. It all depends on your particular business model and whether or not the additional reports/added features add value to you. So do your research first.
Understand that not all construction companies have the same business model nor do they all use QB the same way. Depending on the type of contractor you are influencing the setup. For example, for home builders…whether you do spec homes or just presold homes will have an influence on how you set up your chart of accounts and your item list. Also, depends on how your draw accounts are set up. Not all banks or contractor business models are created equally. Not necessarily good or bad…just different so a cookie-cutter approach may not work for your business model.
It pays to work with someone who REALLY knows QuickBooks®and how to set it up from the beginning. It will pay you huge rewards to set it up correctly the first time and learn how you and your staff need to use it to best fit your particular needs. Rework always costs more.
Take time to review your reports. The numbers are what make or break any business and being too busy to not utilize financials is not good business sense. If you want to be profitable and not just busy, take time to know where you are and are not making money on a project.