Will QuickBooks Online work for my Construction Business?

I was originally asked to write this article for QBOChat where it was published back on March 8th. I wanted to share it here for our readership as well (with a few minor changes.)

Have you heard it won’t?

If you are a construction company owner who has been told that QuickBooks Online won’t work for your construction business, you may want to take a second look. There are still quite a few accounting professionals who tend to think of QuickBooks Online in the same way as they view the QuickBooks Desktop software package. Don’t get me wrong, QuickBooks Desktop is still a powerful piece of software and it is still being improved upon by the great folks at Intuit. However, to truly understand QuickBooks Online you must understand the idea of SaaS, cloud computing, and app integrations.

So, what is SaaS? No, it’s not the lip that you used to give your mom and for which you were sent to bed without your supper. SaaS stands for Software as a Service. QuickBooks Online is designed to be run from the cloud and one of the major benefits of this cloud computing model is the ability for QuickBooks Online to integrate fairly seamlessly with other cloud based apps. Cloud computing and SaaS programs – “apps” – are really the future of small business management.

OK, so what?

Why, you may be asking, does this matter to me in terms of my construction business. Back to our original proposition – if anyone has ever told you that QuickBooks Online just doesn’t have enough features for you to properly manage your construction business then you should know that they’re right.

Gulp. They’re right. As a Construction Accounting Specialist, I would say that the majority of construction companies (of any size) should not attempt to manage their construction business accounting solely through QuickBooks Online. Yet, the beauty of app integrations with other cloud based software is that now you can take your accounting software – QuickBooks Online – and link it directly to your project management software – for instance, Knowify – and have all the integrated project management and accounting data be magically imported into QuickBooks Online without having to do any manual data entry from one program to the other.

Just think

Think about the ramifications of that for a second. Just a few short years ago, the various aspects of running a construction company were broken up into various parts – estimating had their software tools, project managers had their software tools and accounting had their software tools. These various software systems operated independently of one another. So, estimating would work on an estimate (say they put that together in a spreadsheet program.) Then, they had to communicate that information to the project manager and to accounting – both of whom enter the same data all over again into their respective project management and accounting platforms. As the project progresses, the project manager had to communicate with accounting information about project costs, time and materials, what portion of the job is complete, and so on and so forth.

Let’s take a walk in the cloud

Now, step into the world of cloud computing, Knowify and QuickBooks Online. With these two powerful tools integrated nearly every step of a project (no matter how complicated) can now be managed in one simple tool. Accounting still has the ‘back end’ system of QuickBooks Online for maintaining non-project related items such as payroll and bank reconciliations, but everything pertaining to the projects is now flowing through the one, easy to use system of Knowify and the accountant never needs to do double data entry work to make sense of the numbers because Knowify pushes that information into QuickBooks Online without even having to click a button. Estimating enters their estimate directly into Knowify using as much or as little detail as necessary. The project manager can manage every piece of the project from scheduling to materials invoices to billing right within Knowify. All along the way, every detail that needs to post to QuickBooks is posting to QuickBooks. The accounting department (or your knowledgeable QuickBooks ProAdvisor or Construction Company Network Advisor) can see every piece of the accounting puzzle as it pushes into QuickBooks. Financials, job costing, and other reporting tools can be accessed much more quickly because there is much less time spent between when something happens out on the jobsite and when it is accounted for in the books.

Not only that, but if you need to prepare AIA type billings on a regular basis and they give you headaches trying to figure out what the exact percentage of completion will be for that month, then you will really fall in love with Knowify’s AIA billing capabilities. Not only does Knowify track your costs and progress on the job so that you can have a very accurate picture of percentage of job completion, it even has built in AIA style forms that most general contractors will accept. (Does your QuickBooks Desktop do that?)

Now you know – and,

The next time someone tells you to stay away from QuickBooks Online because it isn’t the right tool for the job, remind them that a drill with no bits is never the right tool forthe job either!

10 Personal Tools Every Construction Contractor Needs

I’ve discovered Construction Contractors and Subcontractors are among the most adept and proficient folks around. They wear such a profusion of hats (skilled tradesman, project manager, marketer, salesman, HR manager, supply-chain manager, customer-service representative, PR manager) it can be mind boggling.

Yet there are 10 Personal Tools they need to use no matter which hat they happen to be wearing at any given time.

The quality traits (tools) of excellent construction contractors

  1. Planning Ability

Simply determining to begin a business built on your skill set as well as your desire to learn more about what it takes to “be in business” is a great start. At every turn, your ability to plan and prepare for what is coming down the road will make a difference in how you manage, build, and maintain your business.

  1. Strong Work Ethic

You have to have a ton of ambition. It goes beyond just getting up every day and going to work. You actually enjoy fixing the problems that arise. And you’re actively looking for more jobs which mean you have more problems to solve.

  1. Strong People Skills

You not only have to manage the guys and gals in the field and office, you also have to work with the customer – who can range from general contractors to home owners and anywhere in between. You’re also good at letting other people’s strengths shine through.

  1. Confident

You have to remain confident in your overall ability to complete the many tasks at hand. That doesn’t mean you think you can never make a mistake. It does mean you’re sure you’ll be able to learn from those mistakes and continue moving forward.

  1. Open Minded

Going hand-in-hand with your ability to remain confident is your ability to remain open minded when new ideas, new concepts, and new means to accomplish a task are presented to you. You’re willing to weigh the evidence before making a final decision.

  1. Money Management Skill

When capital is limited and needs to be utilized wisely, you know how to manage for right now while still planning for the future. You know how to keep a handle on cash flow and how to use financial reports for building your business.

  1. Networking Ability

You’re a relationship builder. You pay attention to what others tell you. You’re willing to help others even when it doesn’t seem there will be a quid pro quo. You make others feel at ease when they’re around you.

  1. Delegator

Even though you likely began your construction contracting business wearing a multitude of hats you know when to give one or more of those hats to others. You know how to give people a task to complete without micro-managing how they complete it.

  1. Risk Taker

You understand that taking a risk is the only way to move forward. You look at all the ways you can think of to mitigate the risk, you take those actions, and you still know that failure is possibility.

  1. Integrity

Honesty and trust are central to your integrity. You demonstrate your integrity by being trustworthy and dependable. You are principled and can be counted on to behave in honorable ways even when no one is watching.

Stocking your tool box

Having as many of these tools as possible in your personal tool box will make your job as a construction contractor flow better. You may not have every single tool in this list shined and ready to use. But, if your desire is to scale your construction contracting business then you’ll discover these are personal traits or qualities that will work well for you now and in the future. If you find you have personal weak points, be sure to surround yourself with folks who are strong in those areas. Some things you should consider are: hire a business coach, seek a mentor, outsource some areas, look for qualified advisors, build a good team.

*************

Why yes, Schulte and Schulte, LLC is a great option for your bookkeeping and accounting outsourced needs. And by golly, we’re team players. Give us a call 480-442-4032 or toll free 866-629-7735