Business people who work consistently on fixed-priced contracts learn early on that the profitability of their business depends on two things: the quality of their job costing analyses and their project management/execution. Surely Microsoft helped many businesses – and saved many an envelope – when it introduced Excel in 1985. But this is 2018 business, not 1985, and using Excel to cost out your projects and run them is going to put you at a disadvantage vs. competitors that are using modern technology.
While Excel can do a fine job calculating your cost estimate from your line-by-line manual entries, it will in no way help you translate your estimate to actual real-world activity, nor will it give you any insights (absent further manual entries from you) into how you’re performing on your project. Worse, as we all know, everything in Excel is subject to human error: accidentally messing up a formula or misentering even a single field could cost yourself thousands.
Enter Knowify project management. We bring job costing and project management together in a simple yet incredibly powerful way to ensure that you can produce a precise job cost estimate AND track, on a continuously updated basis, your performance against your targets.
This question (in its many flavors) is one we encounter quite frequently at Knowify. We know from experience that accountants can have pretty strong opinions about this question, but we’re also not afraid to share ours. In short: No, you should not. Here’s why:
Including overhead in job costs only tells you about the past. Focusing on project-based profitability helps you plan for your future.
QuickBooks Online has an awesome feature that can automatically load your Credit Card transactions into your QBO account. Knowify has an awesome feature that can automatically load your QBO transactions into your jobs. Put the two of them together, and you get some great automated job costing!
To start this process, you’ll need to know that Knowify can only pull any Expense transactions from QuickBooks. You can find the full list of expenses in QuickBooks here:
QuickBooks will auto-pull your credit card transactions into your QBO account, but they won’t automatically end up in the Expenses. You’ll start by going to the Banking tab of your QBO account:
This is where you will see all credit card transactions that have been made and synced with your QuickBooks account. However, to pull them into Knowify, you’ll first have to pull them into your Expenses. You can do this by selecting the necessary lines:
And when you choose “Accept Selected” it will pull them into your Expenses:
And when you sync with Knowify, it will pull them in as purchases:
You can click on the dollar value in the “Description” column to point them at Knowify jobs:
And it will be as simple as making sure all the expenses are allocated to the correct jobs in Knowify for job costing! You can learn more about pulling expenses from QuickBooks into Knowify in this video!
Yum! Bacon and business intelligence — it’s a contractor’s dream.
Are you going to the Intuit/QuickBooks Scaling New Heights “Epic Practice” Conference in the Bahamas May 21-25th? Scaling New Heights “Epic Practice” Conference in the Bahamas May 21-25th? If you are, let’s meet at the Knowify QB Integrated Apps breakfast Tuesday, May 25th at 7am for bacon, eggs, and a deep dive into the “Many Different Flavors of Job Costing,” or “How-to strike the right balance between boring data entry and essential business intelligence.”
The difference between profit and… Preciseness matters. As a contractor or subcontractor, you know how slim the margins are between installing a door that swings shut easily and a door that sticks
Your business — its profitability, or lack thereof requires equally precise data. How well you specify that doorjamb, how carefully you measure — whether it’s to the nearest 1/8-inch, or 1/16th-inch, or depends on the end result desired and the acceptable margin of error. Such is also true when it comes to job costing. How granular, how detailed, how deep you dive depends on the scope of each job and its margins.
Join me, Dan de Roulet, co-founder of Knowify for contractors, a QuickBooks Integrated App, for an overview of job costing over coffee where we’ll discuss:
• The different “flavors” of Job Costing, from the very simple to the very complex; • Evaluating the upside and downside of each job costing approach; • How-to develop a framework for selecting the right approach to match your client; • How QuickBooks Online + the right job costing solution can help you manage and address complex business intelligence / accounting challenges in a way that QuickBooks Desktop cannot; and • Why you need to KNOW your business to GROW your business.
We’ll also cover the three levels of “job costing:”
• Basic: How much did I make (am I making) on a given job? • Advanced: How much did I make for each piece of work I performed on a given job? • Professional: How did I perform against my phase-specific budgets? Where was the slippage? Where can I do better next time?
Knowledge is power, BUT…How do you know whether it’s worth the effort? Join us at the Knowify for Contractor’s Scaling New Heights breakfast and we’ll chew over how to evaluate each job by complexity, which in turn will inform how much data you’ll need to accumulate to be efficient and profitable. We’ll review, for example:
• Job Complexity: Complex jobs are often multi-layered, difficult to track, often opaque. Inputting and accessing numbers can help you cut through the fog so you can see and understand where you and financially on that job. • Job Size: It’s always preferable to know where you stand on a job, what’s on track and when a job is running off the rails. When it’s a big job, there’s more at stake. So, the earlier you know when things are getting off track, the more likely you are to save lot of $$$. Timeliness matters — especially when it comes to how you’re doing! • Future Benefit: Will what we did not this job help you do a better job in the future? The more useful the information will be in the future – this is a function of repeatability – the greater the value in capturing it.
Smart operations matter QuickBooks is good! But the right job-costing add-on can make QuickBooks even better. Knowledge is power. Are you bidding accurately? Allocating time and materials appropriately? Do you know where your people are and what they’re doing? You should. Accessing tools to deliver real transparency into hours, job assignments, client management, and productivity to ensure projects stay on schedule and on budget can make the difference between eking out a living and making real money. And maybe cut down the back office cleanup you do nights and weekends. Win. Win. Win!
So how do you get there? Do your research. Knowify, for one, can help. We’re already helping contractors integrate their business management needs with accounting systems like QuickBooks from an easy-to-use interface accessible from any device — in the field and in the office.
If you have any questions or wish to share your feedback, you can find us at firstname.lastname@example.org.