Any of you using Quickbooks Pro for a tool in your EC Business?

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bjp_ne_elec

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I have been thinking of purchasing Quickbooks Pro to help me with my EC Business, and I would like to hear feedback from others, if they've had anyone who has tried it.

One question I have is related to materials and how you set up the purchase of items - some very job specific, and some not? Things
like screws, tape, and even things like Romex may be not entirely consumed on a specific job. Do you set up an inventory for items like this,
and then just charge them to the job from inventory? I know someone in that past who had some familiarity with Quickbooks, indicated
that you need to make a decision on whether you will maintain an inventory right up front.

When purchasing materials for a job, how do you enter that in to Quickbooks? Then you have to show the specific material going
towards a job - how do you do that. Is it done when you do the invoice for a particular job.

Also, things like tools - how do you set that up?

Thanks,

Brett
 
I use QuickBooks Premier Contractor Edition. It works pretty well.

At one time, I thought about setting up an Item for each thing I buy, but I decided it was more trouble than it was worth. I don't keep an official inventory and generally just buy materials as I need them for each job. When I buy them, I enter it in QB under Job-Related Material Costs. Miscellaneous stuff like wire nuts, tape, screws, etc. also fall into this category. It all falls under Cost of Goods Sold as far as taxes are concerned.

Sure, I have materials and supplies sitting around that wind up accumulating after they aren't used on jobs, but I don't officially keep track of them. I also make an active effort to use stuff lying around before I buy new materials for a job so that I don't wind up collecting too much extra stuff.

Your friend is right about deciding on whether to have an official inventory. You have to decide up front if you are using "cash" accounting or "accrual" accounting, and once you make that election with the IRS, you have to stick with it unless you formally request a change. If you do accrual accounting, you have to keep track of your inventory.

When buying materials for a specific job, I have a job set up already in QB and list the job when I enter the charge. There's a column for selecting the job. It's a good way to keep track of expenses for each job.

For tools, I have two ways to do it. If it's a fixed asset (e.g., rotary hammer, generator, etc.), I set up an Item in QB so there is a record of when it was purchased, cost, etc. I can then write it off under Section 179. Some cases require depreciation to be done, but it depends on circumstances (ask your accountant to be sure). QB is set up to do depreciation if you wind up going that route.

For minor purchases like screwdrivers and drill bits, I consider them expenses and list them under miscellaneous purchases.
 
Brett
I'm with Jeff. For right now your still in the start up stage & a one man one crew shop. Keep it simple & dont' keep track of inventory or inexpensive materials. You'll find your self spending all your time doing paper work that will have no bearing on your business.
Keeping inventory & job cost will become important when you have more crews, and need to keep track of expenses & theft.
 
I'm defiinitely wanting to keep it simple - but just so I'm clear - I'm buying things like screws, tape, etc. - how do I show the purchase? Then on the other side, how do I charge it out to the job? I'm going to show a purchase on my account for these things, so somewhere it's got to balance - correct?

Thanks,

Brett
 
Brett,

IMHO you're better off setting up your business on a cash basis rather than an accrual basis. If you operate under a cash basis you declare income when you receive payment or make the deposit into your bank account and you realize dept when you actually pay it. Under an accrual basis you recognize the income when you send out an invoice and incur debt the day you buy it from the supply house. I can't see declaring income that I don't have yet. Maybe one day when I'm as big as Exxon I can change that so my shareholders can see how well I'm doing !!!

Phil,
Gold Star Electric
New Jersey
 
I do pretty much the same as Jeff, if its something small like wire nuts or tape I either I usually just bill it to another job, they don't actually pay for it it'll just show a lower profit from that job.
 
BJP
I Use An Older Version Of Quickbooks Usually When I Purchase Materials I Show It As Job Materials And I Dont Charge It To Any Paticular Account. And When I Invoice I Have A Line Item For Miscl. Hardware It Shows On The Bill And Honestly I Guestamate An Amount Of To Cover Those Items (usually A Couple Of Bucks Depending On Size Of Job).
 
There are two types of bookkeeping cash and accrual. Cash you charge for material and labor starting a paper trail when you bill it out. Accrual is when you buy the item enter it into your inventory and then meter it out to different jobs keeping inventory and depreciation records and paying ad valorem taxes on inventory. Its a corporation asset when you buy it and can be accounted for in your books. You either use one or the other not both and cant change from one to the other without a lot of professional help.
KISS (keep it simple stupid) is my motto. Bill it out as you go grab the cash and pay the tax man employees then yourself in that order. If you are a corporation get a bookkeeper or accountant to keep you straight. Its well worth the money.
If you have gotten to the point where you are running several large jobs and see a marketable and profitable ongoing concern, you already have spoken with an accountant and have your books set up right. One person told me when he asks his bookkeeper what his position is financially it should take them a week to get back to him and then the picture would be accurate for a week ago.
 
I use quickbooks pro and highly recommend it. The sooner you start using it the quicker you can learn the in's and out's of the program. It will be much easier to learn and absorb it as you are starting out, and presumably have some time to spend learning it.

Personally I don't track inventory with qb. I have my own cryptic methods for that. When I pay my supply house bills each month the checks are just assigned to a "materials" account. That is how my accountant set me up.

Do make sure that your accountant knows and uses qb. I imagine that most do, but have heard of some who don't.

For validation of qb, my sister-in-law is a CPA and CFO of a very successful company in NJ. They are about a 100 - 150 million dollar company. They use qb, including their payroll service. She swears by it, and if there were ever a mistake, qb deals with IRS, not you.
 
If you haven't yet filed a Sched C income get one & look at it.
It has line items for materials & another for supplies. You can list your misc screws& tape there.
Besides setting up supply accounts I have one credit card just for work in the company name & one for personal. Keeps everything seperate.
As far as charging it out on a job, just over guess what your using & charge for it. Or charge $10/hour more & let it include little stuff.
 
We have been on Quickbooks since 96. We are now using 2006 QB Enterprise since we outgown the smaller versions. We have an inventory items list of around 5000 items, all of which were hand entered. Little things like screws, wire nuts, tape, pvc glue are in it. We charge for every little item on a service call. This has helped tremendously on income. Yes it takes time to enter those things in, but you get paid for them. These little things are a high mark-up item. A 6/32" screw for example, you pay what, less than a 2 cents for one. These little things you can mark-up 5 times and nobody really says anything because it is only a dime. Software was my biggest help back about 15 years ago. Now we could not operate without it.
 
We are a smaller company and we use Quickbooks "On-line". Only been using the on-line version about 1 1/2 and works good because of the fact of being able to invoice from my office and another location (brother lives in different city) we can both invoice or ??? and review seperately or both go on-line and know we are both looking at the same thing. We don't use it to the full extent of the program (probably not even close to it) But I'd like to use it to to be able charge for breakers,fixtures,conduit, wire, time and material, the problem I'm having is setting up the parts list and how catagorize them...do you use a generic part number like a "70w HPS ballast" would be Bal70hps so all the ballast are listed together and easier to find or remember as compared to using the vendor part # and you would have to know or find the part # everytime you invoice. Would be very interested to see how this is catagorized, I'm not really ready to do invetory but it would be nice to charge the same price for the same part. Which I try and do in most cases...Any suggestions greatly appreciated, Thanks, Jerry
 
Jerry, what we did with our item list is customize it for us. It goes 5 levels deep I think. I started with conduit, EMT, PVC, Rigid, IMC, then below that couplings and connectors, then steel SS and steel COMP, the DD SS then DC COMP, as for wire I simply went by size and type we use most. Started with #18 Thhn up to 600 Kcmil. Man, we go over 5000 items. You have to plan it. We have basic materials, lights, breakers, fuses, devices, plates, disconnects, MDP's MCC's explosion proof stuff, lamps, nuts, bolts, washers and anything you have to buy and can sell. I even have an item called " opinion" because when someone ask for it I send an invoice. Just kiddin, this took months if not years to build. I have had several other contractors buy the item list from me.
This helped me more than anything at cash flow. The only setback is that when wire, conduit or any commodity goes up you have to manually change the selling price. That is why I also have Conest. We have about 4 to 5 people that work in the list at times so I have to clean it up and re-arrange it. When I do a small estimate I click every single item, that way I get paid for it, when I get the approval of the estimate I hand it to an electrician with the prices blanked out and there is his items list down to every nut, bolt or wood screw. I even charge for tape by the 1/4 roll or so.
 
I like the reconcile feature, it helps me see and - or + in my accounts.
Also when I see my acct I make a copy of my quickbooks to a flash drive , bring it with me and throw it on his desk. No paper work needed.
 
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