The Best Construction Accounting Software is QuickBooks

Smaller companies typically do not have the resources to handle their accounting tasks in house. In the past, that usually meant having to contract with a professional accounting firm in order to secure those services. All of that changed, though, in 1993 with the introduction of an affordable accounting software package known as QuickBooks. Smaller companies with little financial expertise soon began to realize that by using QuickBooks, they could handle their own bookkeeping and accounting functions (though there’s still a great value in having a construction accounting pro like Randal DeHart in your corner for those who would rather outsource all of it).

Over the years, QuickBooks has continued to gain in popularity and has introduced versions individually tailored to specific business enterprises, such as construction accounting software. QuickBooks for contractors provides a full array of construction accounting services that will allow you to devote more time to running your business and less time stressing over contractor accounting details. In addition to preparing accurate financial statements, booking construction in QuickBooks will make it easier for you to perform the following functions:

Automate Accounting and Bookkeeping Tasks 

You do not need a strong background in accounting or bookkeeping to use QuickBooks for contractors. Even if you don’t completely understand the difference between a credit and a debit or how to prepare a balance sheet, there is no need to worry, because QuickBooks uses simple entry screens to manage those functions for you.

QuickBooks can be linked to your bank accounts, PayPal accounts and credit cards, making it easy to import transactions into your bookkeeping records. This allows most of your bookkeeping tasks to be automated, improving the accuracy of your calculations and keeping your books balanced. You also will be able to take advantage of the organized data to help you prepare job estimates and control job costs. One of the more important features of automated bookkeeping is that you can get the information you need whenever and wherever you need it. This can make a huge difference in managing cash flow.

For accounting tasks, you will be able to automatically handle the depreciation of your assets by setting up depreciation schedules that are easily modified. When it comes time to file your taxes or prepare your annual reports, you will be able to manage most of this yourself. However, if you need the help of a professional accounting agency (my favorite is Fast Easy Accounting), you will be able to supply them with the information they need, as they are very familiar with QuickBooks.

Access and Run Reports 

QuickBooks for contractors will give you immediate access to the records you need to remain profitable, including profit and loss statements as well as cash flow. You will be able to generate reports for an individual project or for the company as a whole. Such reports can be generated on a daily, weekly or annual basis. If you need to prepare an annual report for your board or for stockholders, Construction QuickBooks will make the job much easier. You can keep your reports simple and to the point, or you can turn them into a work of art with bar charts, line graphs and Excel worksheets.

Make Better Decisions

As a contractor, you are faced with a myriad of decisions that must be made on a daily, if not hourly, basis. Regardless of how well you plan for contingencies, unexpected events will occur. QuickBooks will provide the information you need to determine the health of your business and take any necessary steps to improve profitability. You will know who your most profitable customers are as well as which customers you may want to avoid in the future. You also will be able to gain insight into some of your employees’ spending habits compared to their contribution to the bottom line. Here are some common contracting functions that can easily be handled through QuickBooks for contractors:

• Change orders
• Daily field reports
• Punch lists
• Requests for information (RFI)
• Requests for proposal (RFP)
• Subcontracts
• Workers compensation reports

Track Time and Subcontractors

QuickBooks will allow you to easily track every hour spent on every job. This goes for your own crews as well as subcontractors. You can input expenses that are accounted for on an hourly basis as well as fixed-cost contracts. You can use this data to perform sensitivity analyses to estimate the effects of making certain changes. For instance, you may want to compare the cost of doing certain tasks in house versus contracting those services. You can even park that data in a mini business plan.

Prepare Forecasts

By using QuickBooks, you will be able to predict future events and patterns. This will help you to estimate revenue and expense components and determine future profitability. If you are expanding your operations and need additional funding, QuickBooks will be a valuable tool in helping you flesh out a new business plan. You will be able to make financial projections based on historical data and predict cash flow well in advance. Because planning is a dynamic process, you will be able to maintain flexibility and revise budgets with a minimum of effort.

Plan Demand 

If your contracting business requires you to keep a significant amount of inventory on hand, QuickBooks will help you devise a demand plan that matches inventory levels with estimated product demand. This will allow you to maximize operating efficiencies and control your cost of inventory. You will be able to implement the practice of “just-in-time” inventory control, meaning that your inventory arrives when it is needed and not before. This will allow you to significantly lower your costs and increase your profit margins. QuickBooks will provide the data you need to perform statistical analyses, estimate future demand and establish efficient production schedules.

Manage Job Costs 

QuickBooks will provide the tools you need to complete a job on time and within budget. You will have the ability to track costs on an individual job basis which you can then blend into your overall costs. This will give you flexibility in running reports that continuously show where you stand when it comes to projected revenue versus job costs.

Automate Invoicing 

With QuickBooks, you will be able to send invoices with the touch of a button. The invoices can be as simple as a one-page document, or they can be extremely detailed, including photos, plans and contracts. Instead of waiting for your customers to mail you a check, they will be able to pay with a credit card or a bank transfer. Both you and your customers will have the ability to sign documents using mobile devices. You will receive instant notification when invoices are paid, and you will know exactly where your proceeds have been deposited. If a customer is late in paying, you can send them a reminder.

Satisfy the IRS 

QuickBooks will help you satisfy specific rules and procedures that the IRS has established for contractors. You will be able to produce W-2s for all your employees and verify that you meet government standards for providing benefits such as health insurance. If you use the services of other contractors or subcontractors, QuickBooks will help you generate a Form 1099 for each one. Since you will have more information than you have had in the past, you can make informed decisions as to whether it would be more profitable to use a cash or accrual accounting method. This will depend on the contracts that you have open and your gross revenues for the tax year.

Simplify Taxes 

Construction accounting software makes it easy to keep your tax records organized. You will be able to easily track your expenses as well as your revenue. All of your contractor accounting records will be maintained in accordance with FASB standards. Because your records are kept in one place, you will not have to spend days sorting through paperwork. The information you will need for filing your taxes flows automatically through your system. You can even insert photographic records into your bookkeeping system.

Work from Anywhere 

QuickBooks makes it easy for you and your staff to perform construction accounting services from anywhere in the world, even when you are traveling. By using an app on your phone, you can record your expenses, invoice a customer or send financial statements to a potential investor. Your data is always backed up in the cloud and synced across all your devices. This means that a change made by one person can be immediately viewed by another, even in a different location. Another key advantage of working in the cloud is that you will never have to worry about downloading and installing a new software version.

Summary 

In summary, QuickBooks for contractors will make your life easier. You will be able to automate the majority of your accounting and bookkeeping functions without having to spend an inordinate amount of time doing so. You will have tools at your disposal that will help you fine tune your company’s operations, lower your expenses and increase your profit margins. If you are not quite sure how to use a certain feature, QuickBooks support is only a text or phone call away.  Another good option would be to contact Randal from Fast Easy Accounting, as he can help you work through QuickBooks issues or take all the accounting tasks off your plate completely.