Using
cost codes provide a great way of understanding
where and why the company is making/losing money
easily. Yes, more codes can be added especially
for the specialty contractors. But, at the end
of the day, it all still boils down how the
construction work was estimated, and
then, did the company make/lose
money for their type of work?
If you are
required to use costing/reporting, phases or
other industry codes, brainstorm how you want
your costing items to be presented and upload
them into QuickBooks Enterprise from an
excel file.
Quick tips to
get started
1.
Set up a Customer: Job
for each of your jobs.
If you have previously recorded transactions to the
Customer, QuickBooks Desktop moves those transactions
into Job 1 when you create a job. From this point
forward, use a descriptive name for each job.
2.
Real world examples
–
§
General contractor; for each customer there is one
owner/customer; Jobs are apartment complexes, name is
the complex –
§
Plumbing and HVAC company; Customers are real estate
management companies, name is the specific property
being managed.
§
And now, a scenario for job costing that truly
represents thinking outside of the box: The QuickBooks
user is a wholesale seafood distributor; in this
instance they needed to track purchases. The Vendor and
the Customer is the Fishing vessel. (Customer is
identified by a * appending the name.) The fishing
vessel job is created when the boat leaves after
purchasing bait and ice (hence the Customer designation)
and job is named FPO Current Voyage and the start date
entered.
The
Boat Owner and Boat Captain along with contract
designated
distribution percentages are set up as custom fields.
When the vessel returns it then is assigned a FPO number
(industry standard) and the job renamed to FPO 12345. A
purchase order of the same name is created and the
purchase order completed with the actual catch brought
in. The job is then closed. Resulting reports include
the standard job cost reports along with Active trips
report and the industry standard Settlement sheet for
payouts to Boat Owner. If they can think outside of the
box, so can you!
3.
Enter your estimates
and TALK to your estimator. If you enter estimates, you
will be able to use the full range of QuickBooks Job
Cost Reports. You can review them on an ongoing basis,
make changes as necessary to help you manage jobs and be
proactive. Understanding when and why jobs go wrong
early are critical to overall job and company
profitability.
Estimating
more accurately can in turn help you make more money
from each job and win more jobs in the future.
4.
Assign all of your job-related expenses to a job using
items. It is easy to complete the Customer: Job
category whenever you enter a bill, check or timesheet.
Use the items tab as opposed to expense tab.
5.
Make sure you select the job, not just the
customer when you invoice.
6.
Attach Documents
to your QuickBooks files, whether it be W-9’s for
subcontractors, Proposals, lien releases or other
contract related documents.
7.
Use the QuickBooks Job Cost reports to learn how
your business is doing on a job by job basis. In
addition QuickBooks Advanced Reporting enables you to
create Work In Progress and Completed Contract Reports
for your accountants, bank and bonding company.
8.
Customize forms
so you have what you need. For example”
§
A Schedule of Values
§
AIA Form
§
Committed Cost (built in)
Job costing in QuickBooks Desktop can help you estimate
more accurately. Again, unless you compare your
estimated costs to your actual costs after the work is
complete, you have no way to know if you are estimating
too high or low, and no way of improving your ability to
estimate in the future.
With this article, we have barely scratched the surface
of Job Costing for Contractors. There are many more
tips, tricks, customizations and ideas. Let us help you
brainstorm!
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