QuickBooks Tip: Always Use a Job
Do you wish you could manage your construction business finances more efficiently and gain control over your job costs? Using jobs in QuickBooks can help you do just that.
General contractors, subcontractors, and those in specialty trades should always use customer and job names in QuickBooks. Each contract should be set up as a separate job. For example, if you have one contract to repair a kitchen and renovate a bathroom, the contract could be set up as a job with subjobs for the kitchen and bathroom. If there are two separate contracts for the kitchen and bathroom, each project should be set up as a separate job.
It gets a little trickier with transactions that do not apply to specific customers or jobs or when you need to allocate the transaction to multiple customers/jobs. For example, if you purchase tools, you may need to distribute that expense across multiple jobs in which you will use the tools. It’s also possible that some of your expenses, such as administrative costs, will not apply to a job. In these cases, you can:
•Create a job called “Overhead” and assign the entry to that job.Alternately, you can use a journal entry to allocate the overhead to appropriate jobs; for example if you have a satellite office in Atlanta, you could assign the utilities costs of that office to all jobs in that area in a given period.
•Divide the detail of the transaction so that the single transaction (e.g. check, bill or invoice) applies to multiple jobs.
If you don’t assign a job to every transaction, you will encounter the following issues:
•There will be a discrepancy between the Profit & Loss by job and the Profit & Loss because transactions that do not include a job name will not appear on the Profit & Loss by Job report. If you use a job called “Overhead,” you will show the same totals on both the Profit & Loss and the Profit & Loss by Job.
•The Contractor Edition of QuickBooks will display a warning message that the transaction does not include a customer/job name. Therefore, it’s best to use the “Overhead” job name on posts to balance sheet accounts even though QuickBooks does not allow you to filter the balance sheet by job.
Contact me to learn other tips on how you can use QuickBooks more effectively for your construction business.
About the Author: Terri Richards is an accounting services manager at Kaufman, Rossin’s Boca Raton, Fla. office, and a QuickBooks ProAdvisor. Kaufman Rossin offers QuickBooks training, accounting and consulting services for a variety of industries, including construction. She can be reached at trichards@kaufmanrossin.com
Terri Richards, CPA, is a Entrepreneurial Services Principal at Kaufman Rossin, one of the Top 100 CPA and advisory firms in the U.S.
