Construction is perhaps one of the most unpredictable industries in the United States, and it’s easy to imagine why. Construction development projects take place over long periods of time, making them more susceptible to wage and supply cost increases due to external factors like a booming economy, housing shortage, or constantly changing government policies.
These factors create additional challenges for construction businesses to maintain profitability. It is also why maintaining excellent construction accounting records is essential.
Fortunately, software like QuickBooks helps business owners manage their accounting records accurately and easily. When employed properly, the accounting software enables owners to formalize strategies that help them cope with the erratic external factors and business trends associated with the construction industry.
How QuickBooks Helps With Construction Accounting
QuickBooks offers robust solutions tailored to meet the needs of construction businesses, making accounting tasks more manageable and efficient. Let’s explore some of the comprehensive tools QuickBooks offers to streamline operations and ensure accurate financial management.
Invoicing Made Easy
QuickBooks simplifies the invoicing process, allowing you to send invoices and estimates on the go. You can attach plans, contracts, or photos to your invoices and receive instant notifications when an invoice is viewed or paid.
This can really come in handy if your construction company struggles with delayed payments and often has to wait weeks for checks to clear. With QuickBooks Payments, you can accept payments by credit, debit, and bank transfers, helping you get paid up to four times faster. The mobile card reader even allows you to swipe and dip cards on-site, ensuring you never miss a payment opportunity.
The results? Improved cash flow and timely project completion.
Here’s how this feature works within the best versions of QuickBooks for construction:
QuickBooks Online Plus:
- Send invoices and estimates on the go.
- Attach plans, contracts, or photos.
- Receive instant notifications when an invoice is viewed or paid.
QuickBooks Online Advanced:
- All features of QuickBooks Online Plus.
- Batch invoicing to handle multiple invoices at once.
QuickBooks Enterprise:
- More customization options for invoicing.
Advanced Job Costing
As mentioned earlier, job costing is a crucial part of the bidding process. Accurately estimating costs potentially determines the project’s feasibility or success.
Managing multiple projects simultaneously can be a headache, especially when some start to run over budget. With QuickBooks’ job costing feature, you can track all costs associated with each project, including labor, materials, and overhead. If one project is eating into your budget, QuickBooks helps you pinpoint the cause, such as unexpected overtime labor costs.
This detailed insight allows you to make adjustments, reallocate resources, or renegotiate terms with your clients, helping you maintain profitability and avoid financial surprises.
Here’s how this feature works within the best versions of QuickBooks for construction:
QuickBooks Online Plus:
- Basic job costing tools.
- Track costs associated with each project.
- Run job cost reports.
QuickBooks Online Advanced:
- All features of QuickBooks Online Plus.
- More detailed job costing reports.
- Advanced tracking of labor, materials, and overhead.
QuickBooks Enterprise:
- Comprehensive job costing tools.
- Syncs with QuickBooks Payroll for detailed labor cost tracking.
- Advanced tracking and reporting for project profitability.
Customizable Reports for In-Depth Insights
QuickBooks offers customizable reports that provide a comprehensive view of your business. You can see income statements, balance sheets, and cash flow all in one place and break down profits by revenue stream with customizable dashboards.
For example, the job-wise profitability report shows how much you’ve spent vs how much you’ve estimated. It also shows you how much work is completed and what costs you’ve incurred up to that point. This provides a summary of your construction business, showing the clients served within a particular period and the earnings for them, giving key insight to focus resources on the most profitable markets.
Reports like the Customer Balance Summary or Accounts Receivable Aging Summary make it easier to monitor open invoices, balances, and past-due amounts. You can also use tags to track transactions by category and run reports for deeper insights into what matters most to your business.
Here’s how this feature works within the best versions of QuickBooks for construction:
QuickBooks Online Plus:
- Generate income statements, balance sheets, and cash flow reports.
- Customizable dashboards.
- Use tags to track transactions by category.
QuickBooks Online Advanced:
- All features of QuickBooks Online Plus.
- More advanced and customizable reporting options.
- Advanced tagging and tracking for deeper insights.
QuickBooks Enterprise:
- Over 200 customizable reports.
- Industry-specific reports for construction.
- Advanced dashboards and detailed financial analysis.
Time Tracking and Payroll Simplification
Picture a busy week where your team is spread across multiple job sites. With QuickBooks Time, each team member can clock in and out from their mobile device, whether they’re at the main office or on a remote site. This ensures accurate time tracking and reduces errors.
By integrating this feature with QuickBooks Payroll, you can streamline payroll processing, ensuring that all recorded hours are accurately reflected, reducing disputes, and keeping your employees happy. This seamless process helps you manage payroll efficiently and ensures your labor costs are correctly accounted for.
QuickBooks Online Plus:
- Basic time tracking integration.
- Accurate time tracking for smaller teams.
QuickBooks Online Advanced:
- All features of QuickBooks Online Plus.
- Advanced time tracking with QuickBooks Time.
- Streamlined payroll processing.
QuickBooks Enterprise:
- Comprehensive time tracking and payroll features.
- Job costing for payroll.
- Advanced labor cost tracking and reporting.
Read More: Why Accurate Project Time Tracking is Crucial for Your Business
Efficient Contractor Management
You know how tedious it can be to manage subcontractor payments and prepare accurate tax forms. QuickBooks simplifies this process by allowing you to send subcontractors a request to provide their W-9 and tax ID info directly through the platform.
The software automatically maps contractor payments to the correct boxes on 1099 forms, ensuring compliance and saving you hours of manual work. By tracking expenses paid to contractors for specific purposes, you can easily issue accurate 1099 forms, reducing the risk of errors and penalties and making year-end tax preparation a breeze.
Here’s how this feature works within the best versions of QuickBooks for construction:
QuickBooks Online Plus:
- Request subcontractors’ W-9 and tax ID info.
- Basic tracking of contractor payments.
QuickBooks Online Advanced:
- All features of QuickBooks Online Plus.
- Advanced contractor payment tracking.
- More detailed 1099 preparation tools.
QuickBooks Enterprise:
- Comprehensive contractor management tools.
- Detailed tracking of contractor payments and expenses.
- Advanced 1099 preparation and compliance.
Connecting with Construction Apps
Imagine the hassle of manually entering data from multiple software tools used for lead tracking, project scheduling, and expense management.
With QuickBooks, you can integrate apps like Corecon, Buildertrend, Housecall Pro, and AutoEntry, ensuring all your financial data syncs automatically. This connectivity reduces manual data entry, minimizes errors, and ensures your financial records are always up-to-date.
Here are some of our favorite integration apps QuickBooks offers for construction contractors:
- Corecon: This app helps you manage project leads, bid management, and track project progress. It integrates with QuickBooks to sync financial data, ensuring that your project management and accounting are aligned.
- Buildertrend: Buildertrend offers tools for project scheduling, client communication, and change order management. If a client requests a change order, Buildertrend updates the project schedule and budget, while QuickBooks automatically adjusts the financial records, ensuring accuracy and saving time.
- Housecall Pro: This app is ideal for managing field service operations, such as scheduling, dispatching, and invoicing for contractors. So, if you have a team of contractors providing repair services, Housecall Pro helps schedule jobs and manage invoices, while QuickBooks tracks the financial details
- AutoEntry: AutoEntry automates the data entry process by capturing and analyzing receipts, invoices, and other documents. For instance, when you receive a batch of supplier invoices, AutoEntry scans and uploads them directly to QuickBooks, categorizing expenses and keeping your records up-to-date effortlessly.
Read More: My 5 Top Must-Have QuickBooks Apps
Choosing the Right QuickBooks Version and Setting It Up Properly
Selecting the right version of QuickBooks for your construction business can be challenging. With multiple versions offering various features, it’s essential to choose the one that best fits your specific needs. QuickBooks Online Plus, Online Advanced, and QuickBooks Enterprise each offer robust tools tailored for construction accounting, but understanding which version will optimize your operations is the first hurdle.
Once you’ve selected the right version, the next critical step is to set it up correctly. Proper setup ensures that all features are utilized effectively, from invoicing and job costing to payroll and contractor management.
Misconfigurations can lead to inaccuracies in financial tracking, payroll errors, and inefficiencies in managing projects and expenses. Ensuring seamless integration with other tools and apps you use, such as time tracking and construction management software, adds another layer of complexity.
Expert QuickBooks Setup and Support from MISSION Accounting
This is where MISSION Accounting comes in. We specialize in helping construction businesses select and set up QuickBooks. Our team of experts will guide you through the entire process, from choosing the right version to configuring it for your unique needs. We ensure that your QuickBooks system is optimized for accuracy and efficiency, allowing you to focus on running your business.
Don’t let the complexities of QuickBooks setup hold you back. Reach out to MISSION Accounting today, and let us help you streamline your financial operations, improve cash flow management, and gain deeper insights into your projects. With our support, you can leverage the full power of QuickBooks to drive your construction business forward.
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