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An introduction to QuickBooks for construction

This excerpt is from an article that originally appeared on Construction Software Review website. The article is by Duane Craig and is an extremely informative piece for construction companies. Therefore it was very deserving of a mention on our blog.

Intuit, the developers of QuickBooks software, discovered that small businesses simply wanted to conduct business and let accounting take care of itself — well, almost take care of itself. QuickBooks offers small businesses an easy way to manage their books. Today, the products continue that tradition, and many firms are using QuickBooks for construction accounting — but making accounting easy for anyone in a construction business comes with some tradeoffs. In this first of three installments of this article, we provide an overview of the three QuickBooks software packages most used by construction firms — Premier, Pro and Enterprise.

Ruth Perryman, president of The QB Specialists in Roseville, Calif., said QuickBooks works “very, very well for the construction industry.” She emphasized that the software’s migration path allows for effortless upgrades from the Pro version to the Premier version and through to the Enterprise version.

Dan Apgar, owner of Apgar Construction in Stockton, N.J., said he chose QuickBooks software partly because of the word-of-mouth buzz that surrounds it — a lot of his subcontractors are QuickBooks users — but also because of ease of use. “You don’t have to be an accountant or computer whiz” to be using QuickBooks, he said. “It is really geared toward home-based businesses, contractors and people that run small businesses.”

Construction accounting software vendors also see some value in using QuickBooks for construction. “[It] is inexpensive and simple to use,” said Greg Kirk, president of Universal Construction Software in Orlando, FL, developers of The PowerTools software suite. “It is a good solution when companies are just starting, and the owner knows everything that happens. As the company grows, the need for reporting and controls grows with it.”

That strong showing in the small business segment was born out in a recent Construction Financial Management Association IT survey, which showed QuickBooks Premier with a 24% share of the job cost accounting software market for construction firms with annual revenue under $5 million.

QuickBooks Premier, which costs about $400 for a single user, comes in six industry versions, including Contractor. This version, according to Perryman, offers more reporting specific to construction, like job costing. It also has better tools for working with bids and construction estimates. These tools help to compare the original bids and estimates to what is actually taking place.

For his part, Apgar said he doesn’t see his company outgrowing Premier.

“I don’t plan to have 100 employees or 25 trucks going. I do custom high end additions for people and if I had a second truck that would be a big deal for me,” he explained. “[QuickBooks Premier] is economical to get started in, and the updates and upgrades along the way continue to make it more useful. You also don’t have to upgrade every year. It still works even if your version is two or three years old.”

 

For those looking for an entry level accounting package, Intuit offers QuickBooks Pro, which is about $180 for a single user. According to Perryman, this version works well for those who don’t rely on construction estimates but rather travel to customer sites, assess the work, give a price, do a job, and collect a check as they leave. She said it can handle basic construction accounting needs at companies that mostly need to track money-in and money-out. Once a company needs more specialized functions especially with job costing, estimating and scheduling, then it should be looking at other software, Perryman said.

 

Intuit’s top-of-the-line accounting software, QuickBooks Enterprise, begins at $3,000 for five licenses. It, too, offers several industry-specific versions, including Contractor. According to Perryman, QuickBooks Enterprise is positioned to fit the point when a company hits $1 million in sales and has 20 or more employees. It offers a lot more reports, as well as products that handle field service management, sales management and warehouse management, she said.

 

“The most important things about Enterprise, to my clients, are that you can have a much bigger file with bigger transactions, and the inventory is much more robust,” Perryman continued. “Probably another important thing is that usually when construction businesses grow to be big enough to need Enterprise they have a lot of staff. They don’t want their accounts receivables person to be accessing payroll. They don’t want their accounts payable person to have access to receivables. They want to have a clearly defined separation of duties, like you would want in a well-functioning accounting department. With QuickBooks Enterprise, you can specify who has access to what.”

 

Source: Construction Software Review

 

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