By Craig A. Shutt
No builder or remodeler would expect that buying a fancy circular saw turns someone into a great carpenter. But often they purchase software such as the QuickBooks brand accounting program and expect that it will immediately make them efficient and more profitable. Diane C.O. Gilson's presentation during the 2006 International Builders' Show offered tips, techniques and opinions on making better use of this powerful software tool.
Diane is the president of Info Plus Accounting and an expert on using QuickBooks for construction-company purposes. She presented her ideas during "Controlling Profits with QuickBooks: 15 Tips, Techniques and Opinions," held at 11 a.m. on Friday.
The goal of her tips, she explained, is to take advantage of the program's advanced features to generate better internal reports, so users can make better day-to-day decisions and control their job costs better.
"Construction requires different kinds of accounting based on the type of work you do–developing, homebuilding or remodeling," she explained. "But some people do several types, and there are underlying similarities. Everyone needs to do job costing and find ways to attribute costs to each specific development, lot or job. And a number of those activities–site preparation, foundation work, framing–are the same."
QuickBooks has become one of the most popular accounting programs for construction firms, she noted, calling it "definitely the most user-friendly program." But too often, contractors underestimate what it requires to create a good accounting/job-costing system, and they make early mistakes that haunt them ever after. "It's vital that you take time on the front end to understand the structure you want and get oriented to the internal controls," she says.
Finding help can be difficult, she noted, which is why she has written several guides, including "Accounting with QuickBooks Pro for Home Builders and Remodelers," which is available from the NAHB's www.builderbooks.com site.
Help for pros
She also has created a flexible, pre-built QuickBooks data file, which meets the specific needs of the homebuilding industry. She now sells it under the name "Qlean Start Profile," although it previously was called AccountingPRO. It is designed for builders, remodelers, developers, contractors and their staffs, and to assist the accountants who support them.
"CPAs don't love construction accounting, because it's complex," she explained. "It can be difficult to find someone who understands accounting, construction and QuickBooks." Certified advisors also can be found across the country, she noted, if personal help is needed.
According to Diane, the two questions she is asked most often at her seminars is whether contractors should invest in the more expensive QuickBooks Contractor version or if the less expensive Professional version will work, and how often the program should be updated with a new version. The higher-end version offers strong added features, if the contractor's budget isn't too tight. "Professional will give you 95 percent of what will help you, so you have to decide if that final 5 percent is worth the extra money," she said.
As for updates, she urges users to upgrade at least every other year; enough improvements are made in that time to make it worthwhile. The 2006 version, for instance, has some "drastic changes" in the underlying engine so file size won't be an issue, as it can be for some larger companies. "QuickBooks is making an effort to expand its size so it can offer a version that is effective for any size of company."
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