QuickBooks is one of the most popular accounting resources for businesses to track the financial aspects of their company.
With so much to track financially for a business, the right software makes all the difference. Not only are clients getting the best software with QuickBooks, but they are getting it at an affordable price.
While many companies are taking advantage of this helpful software, you may be asking yourself if the software is useful for construction companies. With so much unique information and details to track, does QuicBbooks keep these in mind to approve accounting efficiency?
Keep reading to learn about how QuickBooks for construction works!
Can You Use QuickBooks for Construction Companies?
Yes, you can!
Not only can you use QuickBooks for construction companies, but it’s actually recommended to do so. There are very specific work processes that need attention in the construction industry. Because of this, it’s important to have a way to track it all.
This is where QuickBooks comes in.
How to Use QuickBooks for Construction Companies
Now that you know you can use it for your construction company, the question is how?
Estimating a Project
When it comes to completing a construction project, it’s important to estimate the cost you will charge as well as the amount of time the project will take.
If you charge too much, you may lose clients, which means losing money. If you don’t charge enough, you may find yourself wishing you had lost the client anyway. Accurately estimating a project is essential in running a successful construction company.
QuickBooks allows you to take the guesswork out of this project and estimate the cost for each step of the process.
Tracking Your Budget for the Project
Not many people go into a complex project prepared to spend randomly.
Because you’re a detailed and reliable business owner, you’ll want to keep track of your project budget. Materials for the project as well as labor fall under the umbrella of “budget.”
Six Simple Steps for Using QuickBooks Desktop
Intuit Quickbooks Desktop software is a great option for small companies, here’s how to get started!
1. Use All of the QuickBooks Lists with a Purpose
A Chart of Accounts is what your client uses to track their company’s Assets, Liability, Income, and Expenses.
It’s important to keep these lists updated with the necessary information. To modify or add to these lists, select Lists, then Chart of Accounts from the menu. There should be general categories such as labor and materials.
2. Keep the Items List Updated
Each client will have a certain expectation for the items they want to use.
Because of this, you will want to make sure you’re tracking the Item List as detailed as your client would like. Start out small and continue to add as your client needs more detailed reports.
3. Customize the Customer and Job Settings
This will depend on the client you are working with.
For example, larger retail chains will need information for the chain as well as the specific location that the project is being completed. Through Lists, you can find a Customer & Vendor Profile Lists Option to track the project.
Make sure you include the project start date, end date, and status in the Job Info tab.
4. Estimate and Track Costs
When working on any large project, you will want to have a big picture idea of what it will cost.
From the Home Page, you can access an Estimates tab which will allow you to assign the estimated costs for your client. As you add bills and checks (Bill and Write Checks tab) you can compare this information to the information you entered in the Estimate tab.
5. Invoice Workflow
How you invoice your clients will depend largely on the method they prefer.
Once you have agreed on a method with your client, you can create an invoice from the estimate tab. Additionally, you can invoice in stages with the Progress Invoicing tab.
6. Submit Reports Timely and Accurately
Certain reports will be available for reporting at different times.
These can be found under the Reports tab. Report examples include…
- Job Profitability Summary and Detail
- Job Estimates vs. Actual Summary in Detail
- Profit & Loss by Job
As well as 11 other unique reports.
While working on QuickBooks with a construction company can be a little bit challenging and confusing at first, over time you will get the hang of it.
What Mistakes Should You Avoid When Using QuickBooks for a Construction Company?
While QuickBooks is an extremely useful business tool in your construction company, it’s important to understand your software before moving ahead with business.
Often times business owners move forward with a project before completely understanding how to use QuickBooks. Because of this, mistakes may be made and the software isn’t being used to benefit your business as it would if you took some time to learn.
If you’re just starting out, it may be wise to have somebody in charge of QuickBooks who has some experience with accounting. This leaves less room for mistakes to happen and the software is able to be used as a business tool instead of a downfall.
Here are some common mistakes that are made with QuickBooks…
- Payroll being outsourced
- Job costs being added through the expenses and/or account tab
- Not tracking both expenses and income
- Not receiving customer payments correctly
- Not using an estimating program with QuickBooks
If hiring a professional to utilize your QuickBooks software isn’t an option for you, that doesn’t mean you can’t use it! While it would be helpful to have someone that’s great with numbers, you can lean on online forums for free help using QuickBooks.
Get Started with Using QuickBooks Today!
QuickBooks Contractor Edition is an efficient resource for so many companies, construction companies included!
The ability to track costs, project timelines, and client information make Quickbooks the go-to resource for any construction company. With so much detailed and valuable information to track, why would you want to mess around?
To get started with Quickbooks, contact us today with any questions you have!