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Discussion Starter · #1 ·
My Job accounting is terrible and it needs to improve, what are you doing to organize and document costs on a per job basis?
 

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QuickBooks does job accounting pretty well - customers:jobs:sub-jobs:etc. All entries get assigned to a specific job or to specific pseudo- or overhead "jobs" that help reporting. Payroll requires additional data entry after it gets imported into QB; it's not too bad in my case because I'm a small operation and we're only working on a few projects at a time. When vendors ask for a P.O. number or code I always include the job code in it; whether it's a big box store or a small supplier. It helps in the data entry later on; if the code isn't on the receipt the job ID gets written on the receipt right at point of sale.

I use the job profitability and other reports, primarily to look for bidding blunders. It's very useful, and depressing sometimes.

Once you get in the routine, it's easy to do it, and doesn't seem to take any more time.

When I started doing it, I expected that it would involve some extra layer of accounts - maybe an additional pair of debit/credit per transaction. But at least in QB's case the job info is really just an annotation to each transaction, that gets used by the reporting system. Very simple really.

Edit: The key is to get the job information onto each transaction from the beginning. It is basically impossible to go back through the books at the end of each month and try to assign transactions to jobs.
 

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I've never found QB to be a good stand-alone solution for job costing--at least from a reporting and management standpoint. It does do an excellent job of recording and categorizing your job costs, but doing something meaningful with that data takes a little more effort. Yes, you can create estimates and then tag costs to the estimate--but there are far better estimating programs out there.

I use a cloud based estimating program, and a series of reports in excel that we use to track job costs on a weekly basis. If you've never been exposed to Percentage of Completion accounting, I would definitely take some time to research as it can save you a lot of money and a lot of headaches.

I've never found the cost codes that come in most software/accounting systems to be very applicable/user friendly for remodeling so I established my own. We use 33 code categories and each code has sub-codes for material, in-house labor, and subs.

For example:

In QB, I've set up items for each code--which correspond to the cost book I use in my estimating program:

Code 17 is framing--which is what all of my guys use when they turn in a time sheet or a receipt. In QB my framing items are set up: 1701 is material, 1702 is in-house labor, and 1703 is subs. When a receipt or check is recorded in QB--it is recorded to the job name and item number it pertains to.

We then output reports on a weekly basis that show costs in each code category to date, and input those into our Work in Progress reports. These show a running total of estimate vs actual costs on a job--an invaluable tool from a PM perspective.

I've searched for a long time to find an integrated solution, that merges seamlessly between estimating system, accounting system, etc. I don't think it exists. For me, the combination of QB for recording and excel for management reports has yielded the best results.

Hope some of that made sense. PM me if you need more help.
 

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Discussion Starter · #6 ·
Ok, maybe I am more plagued by the lack of time I spend in the office. Does anyone have a paper system that rides in the truck with them?
 

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Ok, maybe I am more plagued by the lack of time I spend in the office. Does anyone have a paper system that rides in the truck with them?
Nothing wrong with that--but automation can save you a lot of time once it's set up.

Curious, what volume of projects are you completing in a year?
 

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I've never found QB to be a good stand-alone solution for job costing--at least from a reporting and management standpoint.

I have a series of reports in excel that we use to track job costs on a weekly basis. If you've never been exposed to Percentage of Completion accounting, I would definitely take some time to research as it can save you a lot of money and a lot of headaches.

I've never found the cost codes that come in most software/accounting systems to be very applicable/user friendly for remodeling so I established my own. We use 33 code categories and each code has sub-codes for material, in-house labor, and subs.

For example:

In QB, I've set up items for each code:

Code 17 is framing--which is what all of my guys use when they turn in a time sheet or a receipt. In QB 1701 is material, 1702 is in-house labor, and 1703 is subs. When a receipt or check is made in QB--it is recorded to the job name and item number it pertains to.

We then output reports on a weekly basis that show costs in each code category to date, and input those into our Work in Progress reports. These show a running total of estimate vs actual costs on a job--an invaluable tool from a PM perspective.

I've searched for a long time to find an integrated solution, that merges seamlessly between estimating system, accounting system, etc. I don't think it exists. For me, the combination of QB for recording and excel for management reports has yielded the best results.

Hope some of that made sense. PM me if you need more help.
We do something similar, we use a numerical code for everything.

Framing Materials 124
Trim Materials 144
Irrigation 180
Carpenter 201
Painter/Drywall 202
Crew Labor 203
Superintendent 204
Project Manager 205
Purchasing 206
Sales and bidding 101
Plan review 103
Design 104

Ect....

Its every task from bid to completion in numerical order. All hours by inhouse guys turn in their time and it is coded to their task and role, whether fixed cost or cost plus.

Cost plus, I charge more for PM than feild work, carpenters more than painters and drywall, painters more than laborers.

For fixed bids I still figure labor with these rates , and it needs to be tracked. We use it in conjunction with quick books.
 

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Ok, maybe I am more plagued by the lack of time I spend in the office. Does anyone have a paper system that rides in the truck with them?
Whether it's a paper or computing solution comes down to putting in the time... organizing or inputting it... that's the biggest challenge IMHO...

Once you get past this, the rest goes much easier... Dedicate a certain time of the week for this function... but once you dedicate that time, protect and more importantly use it...
 

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Ok, maybe I am more plagued by the lack of time I spend in the office. Does anyone have a paper system that rides in the truck with them?
No, but my dad and grand dad did for years. Worked well from what they said.

Id probably be doing the shoe box method of accounting if we didnt have someone in the office full time, so I hear you.
 

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Nothing wrong with that--but automation can save you a lot of time once it's set up. ...
It's horribly wrong to consider doing it without a computer. If you do job costing with paper and pencil, you are in practice limiting yourself to adding up the receipts for each job, and knowing what the total is. Realistically, you'll be the only person who can ever make sense of a paper system, and you'll never have any real ability to look at your accounting data. You could spend hours figuring out whether you estimated the foundation correctly, or you can run a report that tells you how profitable all the pieces of the house were, where your mileage costs are going, etc. If you ever hire a bookkeeper or accountant, the first thing they'll do is switch you to a computer-based system.

You want it in your truck? Use a laptop, or get one of the many smart phone apps that integrate with QuickBooks.

You will be up to speed on a computer-based accounting system in no time. You can set it up to reflect your current practices and evolve, or you can pay a bookkeeper to set up the books for you, or buy (or probably get for free) a set of books already set up for a construction business. You will spend less time doing it with a computer.

Edit: I'm not talking about time-wasting, whacko schemes to optimize your business. This is plain-Jane accounting - using a computer instead of a paper tape adding machine, to add columns of numbers.
 

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I use the profit and loss per job report on quickbooks. Except I am plagued with not enough time in the office too, I am not doing that with most of my jobs. But I look at sales and marketing as my top priority in my business, accounting my second. Some will disagree and tell you to make accounting your first priority, but if I am limited in time then my attention goes to sales and marketing, not to accounting.
 

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I use the profit and loss per job report on quickbooks. Except I am plagued with not enough time in the office too, I am not doing that with most of my jobs. But I look at sales and marketing as my top priority in my business, accounting my second. Some will disagree and tell you to make accounting your first priority, but if I am limited in time then my attention goes to sales and marketing, not to accounting.
Amen. I didn't get in this business to spend a bunch of time counting beans. I do quick calculations of payables and payments. If that number jives with my profit margin then I move on to the next job and spend time with family.

I'm twenty years it won't matter much so I don't sweat it. If I every get so big that I need to, that's when I pay an accountant to do it.
 

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You'd be surprised at what a good job costing system will teach you about where your money is going, where you're efficient, where you're inefficient, etc.

It will help your estimating by leaps and bounds.

My accountant is fond of counseling me to make sure "the juice is worth the squeeze"... I.E.--make sure the effort you put into your systems yields meaningful results.

After-the-fact costing is better than no costing--but far too many guys don't look at where the money is going until tax time. They see money coming in, money going out, and as long as the pluses are greater than the minuses they don't pay much mind to the details.

That's a mistake I made for far too long. Even a single owner/operator business can benefit from a basic costing system.
 

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Ok, maybe I am more plagued by the lack of time I spend in the office. Does anyone have a paper system that rides in the truck with them?
All of our foreman start a folder for their jobs. All material tickets, rental tickets, receipts etc go in the folder. If you just keep everything in one place in the truck then input it into a program or excel file nightly/weekly could help. My partner is in the field 99% of the time and he keeps an accordion file in his truck with all estimates I email him and any other info on the jobs.

I'm sure you have thought of this, but wanted to post just in case not.

Good luck!!!

I guess we are pretty lucky it's two of us running the show. I do most of the estimating/business stuff and he takes care of most of the field. We've got totally different skill sets he is one of the best people I've ever seen for getting things done with less or less than optimal help or equipment in the field and I'm better at the business/ tech end of things.
 

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You'd be surprised at what a good job costing system will teach you about where your money is going, where you're efficient, where you're inefficient, etc.

It will help your estimating by leaps and bounds.

My accountant is fond of counseling me to make sure "the juice is worth the squeeze"... I.E.--make sure the effort you put into your systems yields meaningful results.

After-the-fact costing is better than no costing--but far too many guys don't look at where the money is going until tax time. They see money coming in, money going out, and as long as the pluses are greater than the minuses they don't pay munch mind to the details.

That's a mistake I made for far too long. Even a single owner/operator business can benefit from a basic costing system.
I will also second this! When we first started the business we tried Quickbooks online, but it cost us in a huge way. We couldn't figure out how to add the labor costs from payroll to the jobs. Even the "expert" on Quickbooks from the accountant couldn't figure it out. Cost us over 25k :eek: to get the year end stuff done and figure how to charge all the labor from the accountant to the jobs. Bought the computer based software that will let you charge payroll to the jobs and it cut the bill in half or more. Having the program will save you time and let you look at your business profits ( hopefully not losses) much easier.
 
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