News from the National Association of Government Contractors
SBA officials announced on Oct. 4 that the agency is setting up procedures to help woman-owned small businesses gain more access to the federal contracting marketplace. A final rule is forthcoming in the Federal Register.
Working with the Federal Acquisition Regulatory Council, SBA officials will begin a four-month implementation of the Women-Owned Small Business program. They will be building infrastructure to support the certification process and allowing for ongoing oversight.
Officials say that by early 2011 contracts will begin to become available to small businesses owned by women under the program. Such an initiative has been promised for years to bolster access to women-owned businesses who have been an historically under-represented segment of the government contracting community.
The proposed rule states that the purpose “is to enable contracting officers to identify and establish a sheltered market for competition.”
Under an amended statute, contracting officers can set aside a portion of contracts for women business owners without first giving preference to other types of business.
In SBA’s rule, officials identified over 80 industries in which women would be eligible for federal contract assistance under the new program.
To formulate this list SBA officials used the analysis in a 2007 study commissioned by SBA from the Kauffman-Rand Foundation to identify industries where women are underrepresented.
QuickBooks Pro & Premier 2011 and Enterprise Solutions 11.0 offer new and improved Purchase Order Reporting.
The Open Purchase Orders Detail report is new in QuickBooks 2011 versions (Pro, Premier and Enterprise 11.0). As the name implies, the report displays items (cost codes) that haven’t been received in full.
I’m excited to see that after many years, Intuit has finally fixed the Purchase Order reports to ACCURATELY display open balances, without a lot of additional manipulation by the user.
To find the new report, from the Report menu in QuickBooks Pro and Premier 2011 and Enterprise 11.0 -> Purchases -> Open Purchase Order Detail.
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This report lists Purchase Orders by Items or Cost Codes that haven’t been received in full. By default, QuickBooks displays the following information for each Item or Cost Code:
- Date – the date of issue
- Num – the Number
- Name – the Customer and/or Job that the item ordered is for
- Source Name – the Vendor or Subcontractor who you placed the order with
- Memo – the Item or Cost Code description used
- Delivery Date – if you utilize the Delivery Date field on the form, the delivery date you entered will display
- Qty – the original Quantity, Units, or Hours that was ordered
- Rcv’d – what portion of the original quantity ordered has been received
- Backordered – what portion of the original quantity ordered has not yet been received
- Amount – the original dollar value
- Open Balance – the dollar value that has yet to be received
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QuickBooks groups the same items/cost codes together.
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Personally, I would change the way the report displayed information. Rather than to display the information based on Items or Cost Codes, I would like the information to be grouped by Customer and then by individual Job. To accomplish this, I would click the Total By drop down menu and select Customer.
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The Open Purchase Order report has been improved, as it now displays an accurate Open Balance, however, you cannot modify the report to pull in Customer, Job, or Item (Cost Code) Information, however, it only provides a brief summary.
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The Open Purchase-Orders by Job report has also been improved, as it now displays an accurate Open Balance.
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In order for any of these reports to work correctly you will have to enable the use of Purchase Orders (Edit menu -> Preferences -> Items & Inventory -> Company Preferences -> Inventory and purchase orders are active option must be checked); and you MUST use Quantities when you create a Purchase Order, when you receive the item, or enter a bill against it.
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My overall opinion is that for any company that issues Purchase Orders, this is a marked improvement in the overall functionality of QuickBooks.
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If you think that job costing is all it takes to have a good construction accounting system – think again!
You need a firm handle on your costs and QuickBooks when properly setup and used does a very good job, however, you also need to be able to control those costs.
In almost every other industry, the Accounts Payable function is strictly a clerical function, found only in the accounting department.
Most construction managers know that subcontract and purchase order control can only be achieved with a good accounts payable system in place. As much as 75% of your Accounting Department’s time is spent on the Accounts Payable process. Receiving and paying invoices is a constant, on-going process. Therefore, it had better be good.
The problems of having to handle so many accounts with so many different people over extended periods of time can all be solved by how well you utilize the functionality found in the various pieces of the QuickBooks Vendor Center.
- Using the “Enter Bills” in conjunction with the “Pay Bills” functions reduces costs by preventing double payments.
- By setting up and using “Terms” you can improve profit by watching for available discounts.
- By using the Purchase Order function for tracking subcontracts and materials purchases you can avoid over payments.
- You can even setup and utilize a system to track the expiration dates of subcontractor Workers Comp and General Liability policies.
- It can even help you when you talk to your bonding company.
When you utilize the Enter Bills function and setup up Terms, QuickBooks then recognizes that you do not pay all your bills the same way.
- There are vendor invoices that need to be paid by some due date in order to take advantage of discounts.
- Other bills are paid when you are paid for a particular job.
Naturally tracking the discounts and retainages for each can be a time consuming job.
Whom do you owe money to? How much do you owe them? When do you have to pay them? These basic questions have to be answered every day. The QuickBooks A/P Aging Detail and Unpaid Bills Detail Reports are ready with the answers. Since the Enter Bills form asks for a due date, you can input any date, and use it for cash forecasting, or for a final checklist before you run checks.
Features and Functions of a good Accounts Payable system when using QuickBooks:
- Using the “Enter Bills” function allows for immediate posting of invoices
- Using the “Pay Bills” function allows you to take advantage of discounts and provides immediate posting of payments.
- Maintains vendor and invoice numbers to guard against double payments.
- Automatically calculates discounts.
- Track Retainage withheld from subcontractor payments.
- Track Workers Compensation and General Liability Insurance expiration dates for subcontractors.
- Print Joint Checks, 1099’s, and Lien Releases.
- Set up your own “cost” codes to track expenses and/or cost of goods sold expenditures.
- Assign vendor costs to specific cost codes and jobs.
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For many contractors job costing is a key part of the success of their business – how else will they know if they are actually making a profit on the jobs they are bidding on.
Job costing in QuickBooks starts with the Item List. When you tell this to most contractors they respond with “Items — I don’t sell ITEMS — what does Items have to do with construction?????
This is a common feeling shared by many who use QuickBooks – not just contractors.
What is an “Item”?
By way of explanation, QuickBooks is a generic software program which can be used in any industry or business type; therefore, many of the terms in QuickBooks are generic and often confusing when trying to make it work in a specific industry. For example:
- For a shoe store, Items equals various types of footwear; sandals, work boots, dress boots, loafers, etc.
- For a contractors, Items equals various cost codes or divisions; Division 01 – General Requirements, Division 03-Concrete, 03.20.00 Concrete Reinforcing, etc.
- For a bakery, Items could equal different types of pastries, cakes, donuts, or pies.
The bottom line is this – your QuickBooks Item list should contain all the goods and/or services that you as a business “sell to OR charge your customer for.”
Creating an Item in QuickBooks
The second area of confusion for many QuickBooks users is the actual creating of an Item or Cost Code in the Item List.
When you access the Lists menu -> choose Item List -> click the Item button -> and select New – QuickBooks presents you with a very basic New Item window where you can select the Item Type, give it a Name/Number, make it a sub-item of another item, give it a description, a rate, assign a Tax Code to the Item and associate it with an Account (usually an Income Account).
Below is a screen shot of a “basic” item setup showing the Income or Revenue side of the item:
The “secret” to making this item work for job costing purposes is that VERY misleading checkbox statement – “This service is used in assemblies or is performed by a subcontractor or partner”.
Checking this option allows you to turn this item a powerful job costing tool.
When you check the option of “This service is used in assemblies or is performed by a subcontractor or partner”- information about the purchase or cost side of the item is now displayed.
Your Item window now displays both Purchase and Sales information – this procedure is commonly referred to as making an Item “double-sided”. It’s important to note that on the Purchase Information side of the transaction the “Expense Account” that you select can be EITHER an actual Expense Account OR a Cost of Goods Sold Account.
Making your Items Work for you
Once you have made your Item “double-sided” you then have to take a careful look at how you enter checks, bills from subcontractors, employee timesheets, etc.
When entering a bill, use the Items tab:
When you write a direct check to a vendor, use the Items tab:
When you enter an Employee’s timesheet, select the Item in the Service Item column:
All of these actions record your costs that are associated with this Item or Cost Code – and Job Costing is born.
