Feedback On COA

Igal

Hi Guys,
I was researching/creating for the past few days a COA on QuickBooks Contractor 2007.

I was hoping maybe you guys can tell me if on the right track or not.

We are remodelers and we also do several specific contractor trades such as rough& finish carpentry, flooring, drywall etc… our goal is to evolve to become a general contractor with no specific timeline. With that in mind I’m hoping you guys can provide me with some feedback if my QuickBooks setup goes well with the type of work we do.

I would really appreciate any type of feedback.

Thanks in advance

Attached Files

COA.doc (93.0 KB, 49 views)

Double-A

OK, just a pet peeve of mine, but Interest Expense Expense?

Rent Expense Expense?

Is there an echo in your chart of accounts?

You also have
08 Roof Frame
08 Framing Roof Frame

Read through it and delete most of it. Add it all back in AS you need it. Don't put it in there and never use it. Yes its a pain, but better to have fewer unused things. Also, bear in mind that you will have a memo section. I use it often and make sure it prints on all the reports I'm interested in seeing regularly.

Having this many divisions is unnecessary at this point. Adding stuff is much easier than taking junk out.

And why on earth would you need a class item of "revenue"?

I use 4 classes. Subcontractor, labor materials, rental.

__________________
"My clients’ wishes are the center of my attention." -- David Guido, a contractor in Woodstock, N.Y.
New York Times, July 20, 2006

Igal

Quote:

Originally Posted by Double-A OK, just a pet peeve of mine, but Interest Expense Expense? Rent Expense Expense? Is there an echo in your chart of accounts?

The account name is rent expense and then it indicates the type is also expense. your suggesting to rename the account from rent expense to just rent? and the same with Interest Expense?

Quote:

Originally Posted by Double-A You also have 08 Roof Frame 08 Framing Roof Frame

Yea i fixed that and a few similar ones that i forgot to inactive.

Quote:

Originally Posted by Double-A Read through it and delete most of it. Add it all back in AS you need it. Don't put it in there and never use it. Yes its a pain, but better to have fewer unused things. Also, bear in mind that you will have a memo section. I use it often and make sure it prints on all the reports I'm interested in seeing regularly. Having this many divisions is unnecessary at this point. Adding stuff is much easier than taking junk out.

what do you use the memo for?

Quote:

Originally Posted by Double-A And why on earth would you need a class item of "revenue"?

yea no clue it came like that, i agree with you its not necessary.

Quote:

Originally Posted by Double-A I use 4 classes. Subcontractor, labor materials, rental.

so when you create an estimate do you classify labor and material using classes? there is no need to break down the items to something like this for example:

11 HVAC
11 HVAC: Labor
11 HVAC: Materials
11 HVAC: Subcontractors
11 HVAC: Equipment Rental

mdshunk

If you do your own books, your accountant should set up your chart of accounts, at least.

If you do your own books, your accountant should set up your chart of accounts, at least.

If you do your own books, your accountant should set up your chart of accounts, at least.


I repeated myself for a reason. It's that important. Really freaking, super-duper important. A screwed up chart of accounts will cost you big money at tax time for your accountant to sort out. Ask me how I know. No, scratch that... just take my word for it. It will take your accountant literally an hour to get you squared away and on the right track.

If you do your own books, your accountant should set up your chart of accounts, at least.

Double-A

I disagree MD. Unless your CPA understands our business, then he's gonna have like 15-30 items on the COA and just ask you to toss everything into one of them.

For tax purposes, its great, but for actually running a remodeling or construction company, it sucks.

__________________
"My clients’ wishes are the center of my attention." -- David Guido, a contractor in Woodstock, N.Y.
New York Times, July 20, 2006

rbsremodeling

I agree the first 2 years into business I used a CPA with no construction back ground. My gut knew something was not right.

After I switch to a cpa with constuction knowledge the progress and answers to my questions where night and day

The CPA Rearranged, added,explain and caught errors that the first cpa either missed or did not know.

A CPA with construction remodeling background is a must

__________________

Igal

That is exactly how I feel about it.

Our CPA did the taxes for this past year and sent me over the QuickBooks file and I couldn’t make sense of any of it.

So the way I think ill approach it would be to create a QuickBooks file for business operations, estimating, tracking, reports etc... and for tax purposes either continue with what he gave us or just keep all the receipts and paperwork and give it to him at the end of the year.

how do others tackle this issue?

Double-A

Yup.. when you view your COA you're gonna see what is there. When folks enter data, they should know where things go or they shouldn't be the ones entering it. In other words, you don't need to spell out the fact that its an expense, that is a given due to the type of account it is.


For anything that isn't clear.

Vehicle expense - doesn't tell you much does it? Use the memo and put '02 F250 Tires/brakes 104,300miles and you know exactly what was done and when. How long did those new brakes last? well, do a find on the memo field for F250 and it will pop up.




yea no clue it came like that, i agree with you its not necessary.


Are you really tracking what your labor is from your subcontractor like this? Why? Who cares? You get a price for the job and that is what you use. Don't like the price? Get a new price. You want to supply the equipment? Why? Let them worry with it. The money you make on it doesn't pay for the overhead of dealing with it, but the money you make on the lump sum price does.

Its their specialty, let them specialize.

OR

Do you buy the equipment and your folks install but you have someone that has a license rent a set of gauges and tools come in to do the start up on the equipment?

I don't do estimates in QB. We use a different system that is more hand written and Excel based and track our costs there. I understand doing it in QB, I just don't like the way it uses up items (there are a finite number of those) and the way it slows things down overall.

I use the classes for running my reports from QB. How much labor on the Baker job? Subcontractor? Did we rent anything for it? How much in materials?

QB stinks at allowances and adjusting the damned estimate all the time to keep things moving is a stupid way of fixing a short sighted mistake.

My First Rule of business is this...

Things should always be as simple as possible. Any simpler would be dangerous. KIS

__________________
"My clients’ wishes are the center of my attention." -- David Guido, a contractor in Woodstock, N.Y.
New York Times, July 20, 2006

rbsremodeling

1. Get another CPA with a construction background

2 Let the new CPA recommend/setup your chart of accounts with your input

3 Check with your CPA quarterly for the first year until it is smooth sailing

4 come back and post online how RBS helped me out in 3 small steps

5. Buy 2 contractor talk t-shirts with the money you save and send one out to me

My second cpa caught a 60K tax deduction the first one missed. Went back and edited and refiled 3 years with of tax returns for me.

__________________

Double-A

I meet with my CPA monthly over the phone or in his office. We go over every account and what it means to the bottom line and the tax burden.

I run my business. He is a service provider. He does what I want, not the other way around. If your CPA has the misguided notion that he's in charge of anything to do with your business, get a new CPA. Don't let him confuse responsibility with being in charge. They are two totally different things. If he doesn't earn your business every time you talk to him, get a new CPA that will.

The best move you can make is to get one of the QB Pro Advisers here that have a construction background. I think we have one or two lurking about.

They can explain the ins and out of doing what you're proposing based on what the software is actually capable of. It can do much more than advertised and a hell of a lot less than is claimed, depending on how you set things up from the git go.

__________________
"My clients’ wishes are the center of my attention." -- David Guido, a contractor in Woodstock, N.Y.
New York Times, July 20, 2006

Igal

Thanks everybody for the great advice