QuickBooks Tip-Chart of Accounts, Your CPA & Your Tax Return

QuickBooks Setup & Cleanup
Many companies fail to set up their charts of accounts correctly in QuickBooks.  Over the years I have seen charts of accountants that look like a collage of accounts in helter skelter format without any logical order, containing duplicate if not triplicate accounts, inconsistent protocols, and even inappropriate, if not undecipherable, names. At tax time, when their CPA receives either a backup or Accountants copy of the file like OR reports that have been created from the file, it becomes an even bigger mess.  The trial balance that must be created by the tax preparer requires countless hours of reclassifications and groupings to mesh and coordinate the amounts within the file to the classifications required on tax returns and financial statements.  Business owners then bear the costs of needless and…
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QuickBooks Payroll Services-Which Option is Right for You?

Payroll Tips, QuickBooks Setup & Cleanup
Figuring out which QuickBooks Payroll option is right for your business can be a pretty daunting task;  especially with all of the payroll options that are now available. We all know one thing - if you have employees, you have to pay them!  That's simple. Determining which QuickBooks Payroll option is the right solution for your company is a different story though - let's look at the options available: Intuit Online Payroll – internet based and totally removed from your QuickBooks desktop company data file.  It comes in two versions – Basic and Plus. Basic includes the ability to process an unlimited number of payrolls each month, includes free direct deposit or allows you to print checks and check stubs on your own printer – directly from the on-line system;…
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QuickBooks Tip – 5 Reasons To Use QuickBooks Group Items – Part 2

Customers & Accounts Receivable, Job Costing Tips, QuickBooks Setup & Cleanup
QuickBooks provides you with a powerful, and time saving tool within your items list, which is often under utilized and often misunderstood — the QuickBooks Group Item. 5 Reasons To Use QuickBooks Group Items: Creating and using Group Items is useful for quickly entering a group of individual items that you have already set up as single items in your Item List. Group Items are versatile – you can choose to print – or – not to print the items within the group, meaning you can track more detail than your customer needs to see. Group Items ensure that you don’t “leave something out” – which means lost dollars on your part. Group Items speed up the creation of Estimates and Invoices – imagine being able to pull in 19…
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QuickBooks Tips – 5 Reasons to Use QuickBooks Group Items – Part 1

Customers & Accounts Receivable, Job Costing Tips, QuickBooks Setup & Cleanup
QuickBooks provides you with a powerful, and time saving tool within your items list, which is often under utilized and often misunderstood --- the QuickBooks Group Item. 5 Reasons To Use QuickBooks Group Items: Creating and using Group Items is useful for quickly entering a group of individual items that you have already set up as single items in your Item List. Group Items are versatile – you can choose to print – or – not to print the items within the group, meaning you can track more detail than your customer needs to see. Group Items ensure that you don’t “leave something out” – which means lost dollars on your part. Group Items speed up the creation of Estimates and Invoices – imagine being able to pull in 19…
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QuickBooks Tip – 12 Steps to Implement Job Costing

Job Costing Tips, QuickBooks Setup & Cleanup
It’s the start of construction season, is your job costing system in place? While the start of a busy construction season may not be the time to do a full-scale revamp of your current job costing system, it is certainly time to give it a thorough review for the upcoming season and perhaps make some modifications to your existing system within QuickBooks.  As you read through this article, take some notes and see what you can change now and what should wait until you are in “off season” before implementing. QuickBooks is a very flexible and versatile program.  The Customer Center List provides you with the ability to track your Customers (project owners, awarding authorities, or general contractors) that you perform work for.  For each Customer you can then track…
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QuickBooks Tip – Job Costing Starts With A Simple Item

Job Costing Tips, QuickBooks Setup & Cleanup
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. …
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QuickBooks Tip – Determing Cost of Goods Sold

Job Costing Tips, QuickBooks Setup & Cleanup
Question: How do I determine the Cost of Goods Sold for an item? Answer: I tell my clients that Cost of Goods Sold (COGS) is any cost incurred that directly relates to getting the sold goods out the door. I have them ask the question "Would you have this expense if you hadn't made the sale?" Typical examples of COGS are product purchased for resale, subcontractors or vendors you hire specifically for preparing a product for sale, shipping materials like packaging, freight costs of receiving the resale product and shipping the product to your customers, payroll/labor costs of your employees who are directly related to preparing the goods to be sold or shipped out (would you have hired them if you didn't have the product to sell?). Costs that are…
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QuickBooks Tip 10 Plus Methods of Accounting for Construction Contracts

Be A Better Bookkeeper, QuickBooks Setup & Cleanup
Every contractor, regardless of their business structure (sole proprietor, partnership, corporation) has to choose an overall method of accounting; before the first federal tax return is filed.  Accounting methods include: the cash method the accrual method the accrual method which excludes retentions, and (possibly) a hybrid method(s) Depending on the type, size, and length of the construction contract, there are various methods of accounting for long-term construction projects that are allowed - each method has its own advantages and disadvantages. A contractor will need to select a specific long-term contract accounting methods - possibly with different methods for it's exempt and non-exempt contracts - and also selects sub-treatments for the classification of contracts and the allocation of indirect costs. In a nutshell, accounting for long-term contracts relates to the treatment…
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QuickBooks Tips – Contractor Needs – Part 3

Be A Better Bookkeeper, QuickBooks Setup & Cleanup
General Contractors using QuickBooks will have by far the most complex job costing needs.  Tracking the cost of specialized equipment, subcontracts, multiple prevailing wage rates, and retainage in addition to overhead costs, employees, materials and labor charges. Estimating and Job Costing needs will vary depending on the type of contractor you will be dealing with, so if anyone dares to suggest that one “Chart of Accounts or bookkeeping method” will work for all contractors – well you just shouldn’t listen to them Meet Gerry the General Contractor: "Gerry's" usually have the same basic philosophy as Sam the Subcontractor; however, because they have more employees, subcontractors, and bigger “operations” they realize that they need to consider more things when they go out to bid on a job; but they do not…
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QuickBooks Tips – Contractor Needs Part 2

Be A Better Bookkeeper, QuickBooks Setup & Cleanup, The "Sunburst" Website
Sam Subcontractor already uses QuickBooks, he has more complex job costing needs due to certified payroll reporting requirements, payments of prevailing wage fringe benefits and AIA billing.  High overhead costs,  specialized equipment, materials, labor charges are other things that must be taken into consideration. QuickBooks Estimating, Job Costing, and payroll  needs will vary depending on the type of contractor you will be dealing with, so if anyone dares to suggest that one “Chart of Accounts or bookkeeping method” will work for all contractors – well you just shouldn’t listen to them, and here’s why: Meet Sam Subcontractor: I have worked for a lot of “Sam’s” they are great people too.  They usually have the same basic philosophy as Harry the Handyman; however, because they have employees and bigger “operations” they…
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QuickBooks Tip – Working With Contractors – Part 1

Be A Better Bookkeeper, QuickBooks Setup & Cleanup
An infusion of federal infrastructure funding through the American Recovery and Reinvestment Act (ARRA) have had and will continue to put more contractors and their employees back to work.  Federal investment in Public Works projects will create jobs throughout the country and not just construction jobs. While additional public infrastructure projects will allow the construction industry to maintain their current workforce and will even necessitate hiring more workers.  You will also see contractors who have previously worked on other types of construction projects (residential and/or commercial) begin bidding on newly created Public Works projects. This will also encourage contractors to purchase equipment, thus preserving and creating manufacturing jobs. As a Certified QuickBooks ProAdvisor or Accounting Professional who is working with construction clients - you are entering into a very challenging…
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Contractors Using QuickBooks Have Special Bookkeeping Needs

Be A Better Bookkeeper, QuickBooks Add-Ons, QuickBooks Setup & Cleanup
As we all know, having an accounting system is a vital piece of any successful business.  An accounting system provides an automated and easy way to track how much money is being made vs. how much money is being spent. Creating proper accounts in an accounting system to track business Assets, Liabilities, Equity, Income, Cost of Goods Sold, and Expenses will allow your construction client to see an overall picture of their company's worth or value from a financial standpoint - not only for themselves, but also when they apply for a loan, or have to be bonded. A construction company, like any other company, has numerous responsibilities - to their employees, customers, vendors, subcontractors, investors, and even the government. Contractor Business Needs: The construction industry has some very specific…
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