Every business has unique accounting needs, but accounting for contractors and construction businesses presents some special challenges.
First, a contractor’s billing, production and labor primarily revolve around projects. Each project has its own unique inputs and requirements, and those projects are continuously starting and ending throughout the year.
Second, a contractor’s work takes place on different job sites rather than a fixed location. The contractor must move its equipment and labor from job site to job site, making it difficult to accurately tie direct labor and equipment costs to each project.
Finally, many contractors work on projects that can last months or even years and require multiple payments during that time. This makes revenue recognition and cash management particularly challenging.
Fortunately, Intuit recognized these challenges and came up with QuickBooks Enterprise for Contractors. This industry-specific edition of QuickBooks Enterprise comes with all of the essential tools needed by every business, plus provides some specialized tools necessary to handle the requirements of construction accounting.
Here is a look at the top seven features contractors will find valuable in QuickBooks Enterprise for Contractors.
Estimating and Job Costing Tools
Correctly accounting for job costs can be a massive challenge for contractors. When job costs aren’t properly managed, it’s difficult – if not impossible – to determine the actual profit on completed jobs or accurately bid on new contracts.
QuickBooks Enterprise’s job costing features are designed to help you move projects from initial estimate through project completion while keeping track of the bottom line for every job.
The software includes several proposal templates that you can customize to create accurate and competitive bids and win new business. Estimates produced within QuickBooks Enterprise can be easily converted into invoices, where your accounting team or project managers can bill the client by service, percentage of job completion, or a flat dollar amount.
After landing the contract, you can enter invoices, payments, and timesheet data and chose the appropriate job to assign it to.
In the QuickBooks Enterprise Job Costing Center, you’ll be able to see how your business is doing on any job currently in process. This dashboard summarizes essential information on all work in progress, such as profitability and a comparison of actual to budgeted costs. It also provides estimates on the time and cost it will take to finish the project.
This real-time visibility into profitability helps you know where you stand quickly, so you can make adjustments as needed before the project is completed.
Change Order Functionality
Change orders can be either a blessing or a curse for contractors. On the one hand, they’re an opportunity for the company to earn more revenue on the project because of the additional work involved. However, if the contractor performs out-of-scope work before a customer approves a change order, it can lead to conflicts and even lost money.
Nearly every contractor has experienced the pain of getting their paperwork in order at the end of a job and realizing they’ve put more work and hard costs into the project than was included in the original estimate. By that time, the client refuses (or can’t afford) to pay for the overages because they weren’t adequately informed of the scope changes.
QuickBooks Enterprise makes the process of creating change orders and getting paid for that extra work easy. You just need to edit the original estimate and save the changes made. From there, a Change Order window will pop up, allowing you to create a change order with just the click of a button.
If you don’t like the way the change order appears, you can edit the text before adding the change order, or on the change order form itself.
If your team has been a little too informal about change orders in the past, QuickBooks Enterprise for Contractors can help get you back on track, turning that extra work into extra dollars in your bottom line.
Every version of QuickBooks Enterprise comes with Advanced Reporting (QBAR), which allows users to easily customize the reports that are most useful to the business. QBAR includes over 140 starter reports, but users of the Contractor Edition don’t have to waste time sorting through all of those reports to find the one they need.
QuickBooks Enterprise for Contractors bundles many of the reports that contracting businesses find useful, including:
- Job Cost Detail Report
- Job Estimates vs. Actual
- Cost to Complete by Job
- Unbilled Hours by Person and Project
- Job Profitability Summary
- Job Progress Invoices vs. Estimates
- Expenses Not Assigned to Jobs
- Open Purchase Orders by Vendor
These reports can all be customized to fit your contracting businesses’ unique needs as you track various costs and projects.
Improved Electronic Invoicing
Many contractors use progress billing to maintain adequate cash flow while projects are underway. QuickBooks has long supported progress billing, but QuickBooks Enterprise for Contractors makes it even easier for clients to pay those invoices with its enhanced electronic invoicing features.
Using QuickBooks Enterprise for Contractors, you can email invoices to customers with a convenient Pay Now link. Once your client makes a payment, the payment is automatically applied to the proper invoice. You can also create customized electronic invoice templates for each client by adding specific fields (such as purchase order number) or phrases.
You and your accounting team don’t even have to worry about reconciling payments to invoices.
For clients who don’t pay by the invoice due date, you can also set up automatic reminders in QuickBooks Enterprise for Contractors, allowing your accounts receivable team to skip chasing payments while still ensuring the business collects payments.
Scheduling Tasks, Appointments, and More
Being successful in the construction industry requires carefully tracking and managing a seemingly endless list of to-dos, tasks, appointments, reminders, and project milestones. Properly handling all of these tasks and schedules helps ensure projects are completed on time, and new work continues to come in the door.
QuickBooks Enterprise for Contractors helps constriction businesses keep track of all ofthe important dates with a built-in calendar.
When you open the calendar within QuickBooks Enterprise, it automatically displays any to-dos or transactions coming up within the next seven days, as well as any that are currently past due.
You can add new tasks, appointments, meetings, calls, faxes, and emails, assign them a priority, and even link them to a customer, vendor, or employee. You can also add notes about the item in the details box.
By customizing user preferences, you can have QuickBooks Enterprise open those reminders whenever you open the company file, ensuring you never miss an important task or appointment.
Flexible Billing Rates
When adding an employee or subcontractor/vendor in QuickBooks Enterprise, you likely assign a standard service rate. However, what happens when the employee works on more complicated projects that demand a higher billing rate? QuickBooks Enterprise for Contractors allows contractors to set up custom rates for employees, vendors, and customers.
Once you create billing rate levels for each employee and vendor, every time you create a new invoice that includes billable time, QuickBooks Enterprise will fill in the applicable rate for each service based on who did the work.This gives you a lot more flexibility and the ability to control pricing without maintaining complicated lists of different rates for customers or entering all of the information manually.
Disallow Negative Inventory Quantities
Virtually every contractor that carries inventory has experienced negative inventory – when your accounting software shows that there are fewer than zero inventory items in stock. Usually, this requires time wasted trying to figure out where the error took place.
QuickBooks Enterprise can prevent negative inventory quantities from happening. Just check the “Warn if not enough inventory to sell” and “Don’t allow negative quantities” boxes in the company preferences for items and inventory. This will prevent users from creating transactions that will send inventory levels into the red.
If you have issues with negative inventory quantities in your QuickBooks company file already, QuickBooks Enterprise also has a Negative Item Listing Report. This report shows all inventory items with negative levels. After reviewing this report, you can make adjustments to your inventory levels in QuickBooks to increase the levels shown in the software to reflect the actual quantity of inventory items on hand.
There’s a reason QuickBooks Enterprise for Contractors is one of the most popular accounting packages for the construction industry. It’s easy to use and had a depth of features and options you just won’t find anywhere else.
Whether you’re a sole proprietor handing estimates and invoicing on your own or have an accounting team handling the back office functions for you, QuickBooks Enterprise for Contractors offers everything from a simple and intuitive user interface to advanced features like payroll and customer relationship management integrations.
For contractors, it’s crucial to find an accounting software package that fits your needs now and can grow with you. QuickBooks Enterprise for Contractors is designed to help streamline operations, control costs and achieve measurable growth.
If you think QuickBooks Enterprise for Contractors is the right fit for your construction business, get in touch with our Solutions Consultants 855-910-8219 for genuine licenses and hosting solutions.
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