QuickBooks® is a generic bookkeeping and accounting program, designed to be used by every type of business that you can imagine. If it was industry specific, well, it would have the same big price tag! Sure, Intuit makes a “Contractor” version, but even then it’s designed to meet the needs of every type of contractor – from the handyman to the bridge builder.
As a contractor, you know how important it is to have a plan or blueprint in your hands before you go to the construction site and begin work on the project. That way, you know what you are up against. This same principle applies to using QuickBooks Financial Software for your accounting, payroll and job costing needs.
Many QuickBooks users fall for the seductive marketing messages that boast “easy to set up, easy to learn to use” and fall prey to the myth of do-it-yourself accounting. QuickBooks users aren’t the only ones who fall prey to this myth; so do accounting professionals. As a matter of fact, recently I was asked by a QuickBooks ProAdvisor “What are the most common mistakes that you see happen when using QuickBooks for a construction business?”
Here is a list of common mistakes that I see:
- Outsourcing payroll
- Entering job costs using the Expenses and/or Accounts tab
- Thinking or believing that every contractor can/should use the exact same Chart of Accounts or Items List
- Not setting up Items to track both Expenses and Income
- Not using the built-in Estimate function or an estimating program that interfaces with QuickBooks.
- Creating a new QuickBooks file for each project/job
- Receiving customer payments incorrectly
- Not properly applying Vendor Credits to Bills.
- Not reconciling Bank or Credit Card accounts
- Not using the Ask My Accountant Chart of Accounts item for expenditures that are difficult to categorize.
The biggest mistake that I see is business owners (not just contractors) failing to hire someone who can help them to really learn how to use QuickBooks and utilize all the different functions that are available.
There are a lot of really great blogs and user forums, such as the forums here at the QuickbooksUsers Forums and the Intuit Community forums for getting help for free. Keep in mind, when you ask a specific question, it’s difficult for the person answering to know whether or not they should be taking the bigger picture into consideration. When you hire someone who is experienced in using QuickBooks in your industry, they can help you look at the entire plan.
Have a question about using QuickBooks in your commercial/government construction business? Feel free to contact me.