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Managing Projects in QuickBooks®
You are in business to make a profit. So it is obvious that when you take on a project, the amount of revenue you earn must exceed the direct costs you incur, as well as assist with your production overhead, general, administrative, and selling expenses. When set up and used correctly, QuickBooks® can be a great tool for managing your projects - thereby helping to ensure your business experiences profit. Simply analyze your sales and project cycle from bid to fulfillment, and then translate that cycle into a workflow for QuickBooks®.

We establish the foundation by building the basic records for the Job. Create a Customer record for your potential client, complete with all demographics you care to record. Then create a Job record for that customer. The name of the job should be a unique identifier, for easy communication with all employees making purchases for, or performing work for, this job. You can also create sub-jobs if your project is massive in scope, and your client requires identifiable segmentation.

Just like your actual sales cycle, we start with the Estimate. A well-constructed Item List is necessary to build this document appropriately. The items should identify all anticipated costs that will be incurred in order to complete the job. Such costs can be physical components and / or labor requirements. Keep in mind that while you are building this estimate, your focus should be on the anticipated costs you will incur. Try not to think of the selling price until you have the cost anticipation solid. Once you have a solid handle on the costs to complete the project, you can bid an appropriate amount to cover overhead and company growth goals as well. Create a Group Item if you do not wish to share the detail of your estimate with your client, but instead want to present them a lump-sum type of bid.

When the project is awarded to you, it is "go time" and you are ready to execute the plan you built into the estimate. Simply generate the Purchase Orders to obtain from vendors the necessary physical components to complete the project. You can also generate Work Orders to assign tasks to your employees and / or subcontractors.

Once all the purchase orders and work orders have been fulfilled, your project should be complete. From the estimate, you create the invoice for your client. If you are tracking time and costs appropriately, you can report on percentage of completion, work in process, retainage, and perform progress invoicing. The actual costs incurred throughout the completion of the project can be compared to your estimate to hone your planning and estimating skills for future projects.

If this sounds like a workflow you need to implement in your business, Clarity Accounting Services, Inc. can help you set up your QuickBooks file to make this happen. We can train your existing staff, or provide these services directly.
QuickBooks and QuickBooks ProAdvisor are registered trademarks and/or registered service marks of Intuit Inc., used with permission.