Tips for Effectively Using QuickBooks Purchase Orders

Tips for Effectively Using QuickBooks Purchase Orders

Job Costing Tips, Vendors & Accounts Payable
Using Purchase Orders and running the Open Purchase Orders by Job report in QuickBooks are excellent tools for General Contractors as well as Subcontractors who sub out a portion of the job to someone else.  Purchase Orders can also be customized and used to record a verbal bid for materials from a supplier as well as using them to create an Invitation to Bid, which will ultimately be sent to several subcontractors at once. Using Purchase Orders in QuickBooks can help you to ensure that your Subcontractors or Material Suppliers do not charge you more than what they originally quoted you for a price and the Open Purchase Order by Job Report can help you to see how much in committed costs there are left on your jobs.  Both very…
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QuickBooks Tip:  How to Calculate Over/Under Billings

QuickBooks Tip: How to Calculate Over/Under Billings

Job Costing Tips, Reports
The construction industry often requires that your financial statements be based on Percentage of Completion accounting practices - where you recognize revenue progressively throughout the life of the job. The Percentage of Completion is determined by dividing the costs to date over the current budget (Estimate). The current budget is defined as the original budget (Estimate) plus any approved change orders.  An adjustment to the financials for overstated/understated revenue must then happen, because customer monies are often collected in advance of the work in job costing, you’ll want to state the true revenue on the financials carefully. Accounting guidelines recommend that you make your percentage of completion calculations based on  Revenue Earned = (Total Costs to Date / Current Project Budget) x Current Customer Contract Sales Price. In reality, you…
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Automating Job Costing Overtime, an 800 pound gorilla with an attitude

Certified Payroll/Prevailing Wage, From Our Guest Bloggers, Job Costing Tips, Payroll Tips, QuickBooks Add-Ons
Calculating and distributing employee overtime is a burdensome process that many business owners and payroll administrators have to deal with on a weekly basis.  Everyone has a different opinion on just "HOW" that overtime is to be calculated and distributed.  By everyone, I mean the business owner, the payroll clerk, heck even the Federal and State government.  No wonder it's just a problematic situation! At first blush this seems drop dead simple. Overtime goes to the time worked after 40 hours, or maybe over x hours per day as well.  This seems reasonable, but would it be simpler if overtime were just distributed over all the jobs that the employee worked that week.  That seems fairer, as each job gets a share of the overtime costs for that week. Then…
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Breaking Down Payroll by Job, Phase and Cost Code

Breaking Down Payroll by Job, Phase and Cost Code

Job Costing Tips, Payroll Tips, Reports
  Breaking down payroll by job, phase, and cost code is something that I'm often asked about by the construction clients/customers that I work with.  Construction payroll is probably one of the more complex payrolls that anyone can encounter, see this question submitted by a reader. I need payroll broken down by Job, then Phase (service item), then cost code. Is there a way to enter time in QuickBooks by three categories? Thanks, Susan Hi Susan Thanks for stopping by and submitting this awesome question! Actually, I'm asked this question a lot and have been working on an entire training series (eBook and several videos) about different ways that contractors can set up QuickBooks to handle even the most complex payrolls like this - unfortunately it won't be finished until…
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Entering Bills or Checks in QuickBooks – Items vs. Expenses

Job Costing Tips, Vendors & Accounts Payable
  When entering bills, checks, or even credit card purchases in QuickBooks you have the choice to use an Items or Expenses tab - choosing the Items vs. Expenses tab will depend on what the money being spent was for. Your business spends money on a wide variety of things - employee payroll, payroll taxes, office supplies (such as paper and envelopes), utility bills, things that you purchase to resell to others, and goods or services from others are just a few examples.  In essence every penny that your business spends is an expense to your business - but how you record the purchase in QuickBooks does make a difference. Because you do you a choice to use an Items or Expense tab when entering transactions in QuickBooks; many people…
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Estimates vs. Purchase Orders: What’s the difference?

Be A Better Bookkeeper, Customers & Accounts Receivable, Job Costing Tips, QuickBooks Setup & Cleanup, Vendors & Accounts Payable
  Estimates and Purchase Orders can be created using QuickBooks.  Many people want to know what the difference between the two are and when it is appropriate to use them.  I often see a lot of confusion on the QuickBooks forums about Estimates and Purchase Orders, what the differences are, and when you should use each one. An Estimate, otherwise known as a Bid, Proposal, Quote or perhaps even a Schedule of Values in the construction industry, is a detailed breakdown of work or tasks that you will perform in order to complete a project for a specific customer or a specific job and what you will charge them to do it. A Purchase Order, on the other hand is normally something that you issue for materials or the services…
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QuickBooks Weekly Timesheet – Service vs. Payroll Item

Job Costing Tips, Payroll Tips
The QuickBooks Weekly Timesheet can cause a lot of confusion for users who are implementing employee time tracking for the first time, mainly because the timesheet contains both a Service Item and a Payroll Item.  This article will explain what each column is used for and some common pitfalls that can happen. Job costing and employee time tracking are important aspects of many businesses - not just construction businesses.  However, when you initially set up timetracking there are many things that can cause confusion. About Service Items: The Service Item column represents the type of work that is being performed and allows you to select/enter/choose the name of the service item/cost code from your Item List that you want to use when your charge/bill your customer for this work -…
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Creating Estimates In Excel vs. QuickBooks – What’s the Difference?

Customers & Accounts Receivable, Job Costing Tips, QuickBooks Setup & Cleanup
If you use QuickBooks for your accounting and you create your Estimates in Excel instead of within QuickBooks you loose out on job costing capabilities and so much more! I often see and hear comments such as this as I browse the web or talk with potential customers for our software: Right now we are using QuickBooks Contractor. It is ok for our accounting software but we are looking for something that works as an overall system for our office - CRM, estimating, job costing, proposals, work tickets and most importantly easy for my guys to use.  Right now we are using Excel for Estimates and invoices. When I see and hear comments like this I get so confused - because QuickBooks does allow you to create Estimates, Proposals, and…
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Create a QuickBooks Job Cost Report With Hours & Payroll Costs 

Job Costing Tips, Payroll Tips, Reports
A QuickBooks tip for creating a job cost report that displays hours worked and payroll/labor burden costs. Creating a job cost report displaying the hours worked by employee, on a specific job or on all jobs,  for a specific week or at the end of a job which includes payroll/labor burden costs can provide a contractor with vital job costing information so you can see if you correctly bid the number of man hours and payroll costs required on a job. NOTE:  It is highly recommended that you start with a single pay period AND a single paycheck to ensure that your report is correct.  Once the report is correct, memorize it and you can then either finish your payroll or change the dates to better suite your needs. From…
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