As you can see, there is no place to record the Job Cost information which some contractors call Schedule of Values, CSI Codes, SOV, WIP and a bunch of other labels used to describe the terms that are common to both construction accounting and construction project management.
We have seen hundreds of situations where a regular bookkeeper/somebody has input one giant Journal Entry instead of properly coding and inputting each transaction and then told the contractor QuickBooks would not produce accurate Reports of any kind. In a few situations, the bookkeeper has suggested we should use our influence with QuickBooks to get them to fix the problem.
Four things to watch for that could be killing Job Cost Reports:
1. Are there more than three Journal Entries a month?
2. Are credit card charges and payments being recorded with Journal Entries?
3. Are supplier and vendor bills and payments being recorded with Journal Entries?
4. Are the Job Cost and Profitability Reports vastly different from the Profit and Loss Reports?
We Have a Bookkeeping System and checklists for everything and including a Quarterly Review Checklist to make sure all transactions are correctly coded based upon the electronic and paper documents our clients provide us.
If your intention is to someday sell your business and retire, excessive Journal Entries will not help you get the best possible price because there are several financial ratio's that will not calculate using Journal Entries.
From an accounting point of view, there is nothing wrong with Journal Entries and many companies operate with a set of Journals, Ledgers, and Sub-Ledgers and they generate financial reports and file taxes with no problems at all.
From a Project Management and business planning perspective, the opposite is true because accounting looks backward into historical records to determine what happened and why. Project Management, Business Planning and Forecasting looks forward and bases projections on accounting records in the form of financial ratios, job Costing and uses SWOT Analysis to determine the best place to focus your company's limited resources to optimize profits.
About The Author:
Randal DeHart, PMP, QPA is the co-founder of Business Consulting And Accounting in Lynnwood Washington. He is the leading expert in outsourced construction bookkeeping and accounting services for small construction companies across the USA. He is experienced as a Contractor, Project Management Professional, Construction Accountant, Intuit ProAdvisor, and QuickBooks For Contractors Expert. This combination of experience and skill sets provides a unique perspective which allows him to see the world through the eyes of a contractor, Project Manager, Accountant and Construction Accountant. This quadruple understanding is what sets him apart from other Intuit ProAdvisors and accountants to the benefit of all of the construction contractors he serves across the USA. Visit http://www.fasteasyaccounting.com/randal-dehart/ to learn more.
Our Co-Founder Randal DeHart - Is a Certified PMP (Project Management Professional) with several years of construction project management experience. His expertise is construction accounting systems engineering and process development. His exhaustive study of several leading experts including the work of Dr. W. Edward Deming, Michael Gerber, Walter A. Shewhart, James Lewis and dozens of others was the foundation upon which our Construction Bookkeeping System is based and continues to evolve and improve. Check out our Contractor Success Map Podcast on iTunes.
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