QuickBooks for Contractors at a Glance

Welcome

Hello, and welcome. This is Super Structures General Contractors — a national general contractor headquartered in Powhatan, Virginia — here to help you and your clients build something that lasts. We're glad you're with us, and we look forward to connecting with you.

Here's one that matters more than its name lets on — QuickBooks for Contractors at a Glance. If you remember one thing, make it this: QuickBooks is where most contractors start and where many should stay for a while, because it is inexpensive and every CPA knows it, but construction needs like job costing by cost code, WIP, retainage, progress billing, and certified payroll require setup discipline, the right edition, or add-ons. Do this right and you'll get real job-cost reports out of it instead of a profit-and-loss that tells you nothing about which jobs made money.

A six-person framing contractor ran QuickBooks for years and could not say which jobs made money. Every invoice was coded to "materials" or "labor" with no job attached. A bookkeeper who knew construction spent two weekends setting up customers as jobs, items as cost codes, and time tracking by job, and within a month the owner saw that the small residential jobs he loved were losing money while the multifamily work he complained about carried the company. Same software, different setup.

A note before we start: this is a high-level overview, not the training you will need to run the product. Super Structures is not affiliated with, sponsored by, or paid by any company named in this course, we do not sell or support these products, and nothing here is legal, financial, or purchasing advice. This is for learning and education only. Features, editions, and pricing change often. Each lesson lists the vendor's own website, which is where to go for current details, demos, and training.

What it is

QuickBooks is Intuit's small-business accounting line. For contractors the relevant editions are:

• QuickBooks Online (Plus and Advanced tiers), which supports projects, job costing through project tracking and items, time tracking, and a large app ecosystem, and is where Intuit's development effort goes.
• QuickBooks Desktop Enterprise, Contractor edition, which has long carried construction features like job costing reports, estimates versus actuals, change orders, and more flexible reporting. Intuit has been steering new customers toward Online and Enterprise and retiring older desktop editions, so check what editions are currently sold. Both do the core accounting: general ledger, accounts payable and receivable, bank feeds, payroll (as an add-on), 1099s, and financial statements.

Who it fits

Small contractors, subcontractors, and remodelers from one person up to a few dozen employees, especially those whose jobs are short and whose owners do not require AIA-style billing or certified payroll. It is also the accounting system behind many residential platforms like Buildertrend and behind many small commercial subs who run a PM platform in front of it.

What it does well, and where it is thin

Strong: cost, ubiquity, bank feeds, a huge pool of bookkeepers and CPAs who know it, and an app ecosystem for the gaps. Thin for construction: work-in-progress (WIP) schedules and over/under billing need spreadsheets or add-ons; retainage receivable and payable take workarounds; progress billing on AIA-style forms needs an add-on; certified payroll for public work needs a payroll service that produces it; committed cost (subcontracts and POs not yet invoiced) is weak; and job costing is only as good as the discipline of coding every transaction to a job and a cost item.

How it is sold

Monthly subscription per company by tier for Online; annual subscription per user for Enterprise. Payroll, payments, and apps are extra, and the add-ons needed for construction can add up to more than the base product.

How it connects

Almost everything connects to QuickBooks: Buildertrend, Procore (through connectors), estimating tools, time-tracking apps, payroll services, expense tools, and middleware. That ubiquity is its biggest advantage and the reason many contractors keep it longer than they should.

What it takes to run it

A bookkeeper who understands construction job costing, a chart of accounts and item list set up as cost codes before the first job, time tracking by job and cost code, a monthly close that includes a WIP review even if the WIP lives in a spreadsheet, and a CPA who knows construction and will tell you when you have outgrown it.

Where to learn more

For current details, go straight to the source: quickbooks.intuit.com. Intuit's site lists the current QuickBooks Online tiers and Enterprise editions, payroll options, and the app marketplace. Super Structures has no affiliation with QuickBooks and receives nothing from them; this lesson is for education only.

Going Deeper (Intermediate)

Set it up like a construction system: customers and jobs (or projects) for every project, items as your cost code list (labor, material, sub, equipment, other under each phase), estimates entered by item so estimate-versus-actual reports work, and classes or locations for divisions if you have them. Then the job profitability reports are real. Decide at the start whether QuickBooks or your project management tool is the system of record for budgets and change orders, and sync only in one direction.

Build the WIP spreadsheet properly even though it lives outside the system: contract value, approved changes, estimated total cost, cost to date, percent complete, earned revenue, billed to date, and over or under billing, by job, every month. The surety and the bank will ask for it, and it is the report that tells you whether you are profitable or just well billed.

Advanced / Pro-Level

Pros know when they have outgrown it: when the WIP spreadsheet takes a day a month, when the surety asks for percentage-of-completion statements the system cannot produce, when retainage and multiple AIA billings per month become error-prone, when committed cost matters and the system cannot show it, or when payroll spans several states with certified reporting. At that point they move to a construction accounting system (Foundation, Sage, Acumatica and others in this course) and keep QuickBooks in the history books. Until then, they get the most from it with disciplined coding, a construction-literate bookkeeper, and the right add-ons, and they keep the item list clean so the conversion later is easy.

Practice Challenge

A subcontractor on QuickBooks Online wins its first public school job: AIA-style progress billing with 10 percent retainage and certified payroll. What has to change, and what would tell them it is time to move off QuickBooks? (Answer: add an app or process for AIA-style pay applications, set up retainage receivable tracking, move to a payroll service that produces certified payroll reports, code every hour and invoice to the job and cost item, and start a monthly WIP review; if public work with retainage and certified payroll becomes regular, if the WIP takes a day a month, or if the surety wants reports the system cannot produce, plan the move to a construction accounting system.)

In Practice

The framing contractor with jobs and items set up sees which work makes money in a month. The one coding everything to "materials" never does.

Common Mistakes to Avoid

• No job or cost item on transactions, so job costing does not exist
• Treating the profit-and-loss as a job report
• Ignoring WIP, so revenue swings with billing instead of with work
• Letting committed cost live in a drawer of unsigned subcontracts
• Staying on it past the point where the add-ons and spreadsheets cost more than a construction system would

Takeaway: QuickBooks is where most contractors start and where many should stay for a while, because it is inexpensive and every CPA knows it, but construction needs like job costing by cost code, WIP, retainage, progress billing, and certified payroll require setup discipline, the right edition, or add-ons.

Educational content, for learning only. This is a vendor-neutral, high-level overview, not product training, support, or a recommendation. Super Structures General Contractors and Super Structures Learning are not affiliated with, endorsed by, sponsored by, or compensated by any company or product named here, and we receive no money from them. Product names are trademarks of their owners. Features, editions, integrations, and pricing change; verify current details on the vendor's own website before you buy.