QuickBooks has over a hundred reports that can be viewed regularly. You could spend all of your time seeing a report in QuickBooks and trying to find the way to populate numbers in the report. Many reports are designed for specific things. Take, for example, the view of the Home Page. Just because the feature is on the Home Page in QuickBooks does not mean it is useful for every contractor.
It is not practical or recommended for the Small Contractor or Handyman to track inventory. For most contractors, the material goes from the supplier directly to the job, which is not the definition of inventory. Inventory is what goes into the warehouse and stays, and stays and stays.
Most contractors do not have the money to invest in inventory. Your supplier is just down the street. They have an on-demand inventory – what you need when you need it.
Plumbers, Electricians, and HVAC Contractors tend to have a certain amount of inventory, and it is better to do a physical inventory a couple of times a year (end of the year and maybe mid-point of the year and enter as bulk numbers). There are special programs that are an add-on to QuickBooks for those larger companies who need to track inventory. Most inventory programs only work with QuickBooks Enterprise.
Trying to keep track of each item in the job can be overwhelming and not practical for smaller jobs. If it is a Cost+ or Time and Material job, then be sure you only purchase what you need and assign that receipt to that specific job.
Without a proper QuickBooks set up for your construction company, you:
- underbid projects
- earn little money
- often deal with unforeseen cash flow issues
- have no idea if your QuickBooks reports are reliable
When QuickBooks is set up right for your contracting business, you can now oversee what you have tracked. What gets measured, gets managed. One excellent way to do this is through the Five Key Performance Indicators (KPIs) for contractors. These reports are useful regardless of your company size. KPI is a benchmark to measure how your construction company is performing. The five reports you review at 5 PM for five minutes is the best approach and accounting practice you could do each day.
We offer installation of the
Five KPI icons on your QuickBooks Desktop, or you can get it as a bonus upon enrolling in our
KPI class.
In conclusion
Clean, easy to understand, and reliable reports will streamline your accounting processes. Start identifying quality prospects and profitable projects and repeat the quality performances of your construction company.
Five Key Performance Indicators For Contractors is one of our first 12 classes launched
in our Construction Accounting Academy.