QuickBooks Template Users Guide Page 1 
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 CONTENTS

INTRODUCTION
  1. General Information
  2. QuickBooks Capabilities
  3. QuickBooks Limitations
  4. The Right Choice
  5. QuickBooks Versions
  6. Accounting Basics
  1. Management vs Tax Info
  2. Job Cost vs LMSR
  3. Your Accountants Role
  4. QuickBooks Terms
  5. Basic QuickBooks Strategy
  6. Accounts - Items - Classes

MENU COMMANDS
  1. File Menu
  2. Edit Menu
  3. View Menu
  4. List Menu-Chart of Accounts
  5. List Menu-Item List
  6. List Menu-Class List
  7. List Menu-Customer:Job List
  8. List Menu-Vendor List
  1. List Menu-Other Names List
  2. List Menu-Customer & Vendor Profile Lists
  3. List Menu-Templates
  4. Company Menu
  5. Customers Menu
  6. Vendors Menu
  7. Banking Menu

REPORTS
  1. General
  2. Using Template Reports
  3. Insurance Expiration Date
  4. Vendor 1099 Information
  1. Project P&L Reports
  2. Job Cost Variance Reports
  3. Job Cost by Class Reports
  4. Completed Contracts Reports

SPECIAL PROCEDURES
  1. Writing Invoices
  2. Receiving Payments
  3. Creating Statements
  4. Cost-Plus Billing
  5. Progress Billing
  6. Tracking Allowances
  7. Entering Job Budgets
  8. Using Purchase Orders
  9. Taking Discounts from Bills
  10. Costs Paid by 3rd Parties
  11. Loans / Loan Payments
  1. Entering Fixed Assets
  2. Entering Depreciation
  3. Tracking Vendor Insurances
  4. Using Micro Payroll
  5. Modifying Balance Sheet for Completed Contracts
  6. Closing Reporting Periods
  7. Printing Lien Releases on Check Stubs
  8. Entering Handwritten Checks
  9. Bookkeeping Tips

APPENDIX
  1. Technical Support
  2. Legal Disclaimer
  3. Warranty
  1. License
  2. Copyright

 INTRODUCTION
 
1. GENERAL INFORMATION
  1. QuickBooks Pro is a great program that does a terrible job of telling you how to set it up for the construction industry.
  2. The manual, help file and sample company provided with the program are in many cases incorrect for the construction industry.
  3. Properly setup, QB will provide you with all the information you need to run your company, including doing many things the publisher never even thought about (like tracking subcontractors insurance expiration dates).
 
2. QUICKBOOKS CAPABILITIES
  1. Bank Accounts
    1. Write and address your checks.
    2. Keep checking account balances for one or multiple bank accounts.
    3. Reconcile your account balances each month.
  1. Accounts Receivable
    1. Write and print your invoices and statements.
    2. Will track:
      • Who owes you money.
      • How much they owe.
      • Why they owe it.
      • For how long.
    3. Create statements for each customer reflecting every transaction with them.
  2. Accounts Payable
    1. Will track
      • Who you owe money too.
      • For what.
      • For how long.
    2. Write the checks to pay bills.
  3. Fixed Assets
    1. Track the complete history of every fixed asset you own.
    2. Provide a detailed equipment list.
    3. Provide you with the current book value of any specific asset.
  4. Liabilities
    1. Track your loan amounts.
  5. Payroll
    1. Will perform all expected payroll functions.
    2. Will track W/C liabilities.
    3. Will print paychecks and W-2's
    4. Will prepare 940 and 941 forms.
    5. Will track payroll liabilities and payments.
    6. Will track vacation pay and sick days.
  6. Draw Schedules
    1. Will write draw schedules or a Schedule of Values.
    2. Will Track:
      • The amount of each draw.
      • The dollar amount and percentage of prior draws (or Schedule of Value line item).
      • The remaining dollar amount and percentage of each draw (or Schedule of Value line item).
    3. Will prepare Progress Billing Invoices that summarize the status of all draws and what’s currently being requested.
  7. Job Cost Reports
    1. Job Cost Variance Report detailing your current cost against your budgeted amount with both percent and dollar amount difference.
    2. Job Profit or Loss Report comparing your income for the project against your expenses, with the profit expressed as a percent of the income.
    3. Job Cost by LMSR detailing the Labor / Material / Subcontract / Rental breakdown of each line item.
    4. Job Cost Transactions detailing every check, invoice, bill and payment for each cost code.
  8. Other Interesting Reports
    1. Company Phone Book
    2. Preferred Suppliers
    3. Warranty Service Suppliers
    4. Vendor Workers Comp Expiration Report
    5. Vendor Tax Information
    6. Unpaid Bills by Vendor
    7. Unpaid Bills by Project
    8. Completed Contracts P&L Report
 
3. QUICKBOOKS LIMITATIONS
  1. QB will handle up to approximately 20 million dollars per year.
  2. ESTIMATING:
    1. Does not do a good job of estimating.
    2. The estimating function of QB simply isn’t powerful enough for use by contractors and homebuilders.


    Continued on next page... 
 QuickBooks Template Users Guide Page 2 
  1. AIA DRAW REQUEST FORM:
    1. Will not do an exact replica of an AIA draw request.
    2. The Progress Invoice is very similar and contains all the required information.
  2. COST to COMPLETE REPORT:
    1. Will not do a Cost to Complete report.
    2. It will show you how much is remaining in the construction budget for any project.
  3. PAYROLL BURDEN DISTRIBUTION:
    1. Does not do a good job of payroll burden distribution.
  4. CERTIFIED PAYROLL REPORT FORM:
    1. Will not do a certified payroll report.
    2. It will provide a number of reports that will provide the information for this report.
  5. CONSTRUCTION COST per UNIT:
    1. Will not calculate construction cost per-unit.
    2. It will provide you with the project’s component costs (slab, walls, roofs, etc.)
  6. AUTOMATIC LOAN AMORTIZATION:
    1. Will not do a automatic loan amortization calculations for loan payments.
    2. However, you can use amortization tables from you lender to split the principal/interest on your loan payments.
  7. STOP CHECKS to VENDORS with EXPIRED INSURANCE:
    1. Will not prevent you from writing checks to vendors who’s workers compensation or other insurances have expired.
    2. However, it will track insurance expiration dates and will produce a report of vendors who’s insurances are about to expire.
  8. If you absolutely must have one or more of these functions performed by your bookkeeping software, you might be a candidate for one of the $5,000 accounting programs.
 
4. QUICKBOOKS IS THE RIGHT CHOICE
  1. Been in publication for over ten years.
  2. Over 3 million users in the United States alone.
  3. Intuit is a big company.
    1. Intuit is one of the few companies to compete head-to-head with Microsoft and win.
    2. Microsoft does not have a competing business accounting program.
    3. Intuit also publishes Quicken and Turbo Tax.
    4. Intuit spends millions of dollars each year testing and de-bugging the program.
  4. Upgrades
    1. Upgrades are a fact of life in the software business.
    2. Because of it’s lead position in the industry and it’s large installed base of current users, Intuit will continue to support QuickBooks for many years.
    3. Upgrades cost approximately $100.00 per year, which is cheap compared to the upgrade prices of most of the specialized construction accounting programs.
  5. Summary
    1. QuickBooks is a bookkeeping software solution you can learn and stay with for many years.
    2. QuickBooks should be the last accounting program you will ever need to use.
 
5. QUICKBOOKS VERSIONS
  1. Version 5.0
    1. Released approximately 3 years ago.
    2. Added List Reports
    3. Added ability to activate/deactivate anything on a list.
    4. NOT Y2K compliant.
  1. Version 6.0
    1. Released in early 1998.
    2. Added networking capabilities.
    3. Y2K status unknown.
  2. Version 99
    1. Released in late 1998.
    2. Added direct link to Excel and Microsoft Word.
    3. Y2K approved.
  3. Version 2000
    1. Released in January 2000
    2. Completely revised the menu structure for no apparent reason.
    3. Added direct link to Microsoft Outlook, Symantec ACT.
    4. Eliminated the top icon bar and introduced the universally disliked side Navigation Bar.
  4. Version 2001
    1. Released in January 2001
    2. Restored the top icon bar.
    3. Renamed the Navigation Bar to Shortcuts bar and made it's use optional.
    4. Added a "previous files" list that allows easy switching between different company files.
    5. This is the current version.
 
6. ACCOUNTING BASICS
  1. There are two basic methods of keeping bookkeeping records:
    1. The Cash method posts income and expenditures only as the money actually changes hands.
    2. The Accrual method posts income and expenditures when an obligation is created, i.e a bill is received or an draw is earned and billed.
    3. The Accrual method provides better management reporting.
  2. There are three basic types of reports:
    1. Balance Sheet reports that show the company’s assets and liabilities at a specific moment in time (today, end of year, etc.).
    2. P&L Reports that show the movement of money and totals for each P&L account, (i.e income, costs, overhead, etc.) across a specified period of time (by month, year, etc.).
    3. Transaction Reports that show the individual transactions in a specified account.
  3. There are two basic types of tax P&L Reporting:
    1. Percentage of Completion (POC) that recognizes income and expenses as they are incurred.
    2. Completed Contracts accounting in which you record income as a liability and the construction costs as an asset until the day you deliver the finished project, upon which you make a general journal entry to post the income, the expenditures and the profit in all in one day.
    3. POC reporting provides better management information.
 
7. MANAGEMENT INFO vs TAX INFORMATION
  1. Many builders are confronted with bookkeeping systems designed to prepare tax returns, not provide management information.
  2. There is no requirement that your books look like a tax return.
  3. The only requirement is that your books can provide you with the information necessary to prepare your tax returns.
  4. Indications of a tax oriented chart of accounts:
    1. Balance Sheet report contains large entries for Work in Progress and Construction Draw Liability.
    2. Income Statement (P&L Statement) totals direct costs by Labor, Materials, Subcontract and Rental.



Continued on next page... 
 QuickBooks Template Users Guide Page 3 
8. JOB COST DESCRIPTIONS vs LMSR
  1. LMSR = Labor / Material / Subcontract / Rental
  2. Labor means Payroll.
  3. Job Cost Codes are descriptions of installed products.
  4. LMSR are descriptions of legal mechanisms by which you procure goods and services.
 
9. YOUR ACCOUNTANT’S ROLE
  1. Your Accountant plays an important role in your business and should be relied upon to...
    1. Prepare your Local, State and Federal Tax Returns.
    2. Advise you of tax strategies.
    3. Assist you in preparing loan applications.
    4. Render general business advice.
  2. However, your Accountant is too expensive to be your bookkeeper.
  3. Generally speaking, you shouldn't need to pay an accountant to keep a separate set of books just for tax purposes.
  4. Your QB reports can provide all the information necessary to prepare all sorts of tax returns.
  5. Nevertheless, I know a few builders who deliberately pay their accountant to prepare a separate set of books, based entirely on the activity in their checking account, for the sole purpose of preparing the Builder’s tax returns. I think this is a complete waste of money, but it seem to make them feel secure.
  6. You definitely need the services of an Accountant or other tax professional to prepare your tax returns.
 
10. QUICKBOOKS TERMS
  1. "Costs of Goods Sold" are Direct Construction costs.
  2. "Expenses" are Business Overhead expenditures.
  3. "Invoices" are Requests for Payment you send to your customers.
  4. "Bills" are Requests for Payment you receive from your vendors.
  5. On checks and bills, the word "Expenses" would actually be more accurately labeled "Account" because you have access to the entire all the accounts on the Chart of Accounts.
 
11. BASIC QUICKBOOKS STRATEGY
  1. Should be designed to provide management information.
  2. Should be designed to provide an accurate and informative view of your construction company’s financial situation from your perspective, what numbers do you need to know.
  3. Your Cost codes should be on the Chart of Accounts as Cost of Goods Sold accounts, NOT on the Items or Class lists.
  4. Customer Type is used to filter reports based upon they type of customer, i.e. New home buyer, Commercial property owner, etc.
  5. Job Type is used filter reports based upon the type of project, i.e Custom Home vs Remodeling. Allows reporting of profitability of different divisions of the company,.
  6. Classes are used to distinguish between Labor, Material, Subcontract or Rental. Use for tax and insurance reporting.
 
12. ACCOUNTS vs ITEMS vs CLASSES
  1. There are three basic possibilities for posting job costs in QuickBooks Pro.
    1. Accounts - Provides the best P&L reports with gross profit as a percentage of income.
    2. Items - Item reports cannot provide a vertical P&L report.
    3. Classes - Can provide reasonable P&L reports but we use classes for LMSR instead.

 QUICKBOOKS MENU
 
13. FILE MENU
  1. Open Company:
    1. Used to open another QuickBooks company file.
  2. Backup:
    1. Used to initiate backup routine.
    2. Backup every day!
    3. Backup to your floppy drive on alternating days with alternating discs marked Odd and Even.
  3. Utilities - Import:
    1. Used most commonly to bring in vendor and customer info from an existing QB file to start a new QB file.
    2. You must first export the data from the old QB file into a new temporary ".iif" file and give that file a name before you can import the information into the new QB file.
    3. Import function will not work properly if the two QB files have conflicting custom fields. In this situations, you should rename the custom fields in either file to match the other file first.
  4. Utilities - Export:
    1. Used most commonly to export customer and vendor lists to another QB file.
    2. When activated, you select what lists you want to export (usually just the customers and vendors), then QB will prompt you to enter a name for the temporary file.
  5. Utilities - Condense Data:
    1. Used once a year to summarize old data and reduce the file size.
    2. Always make a separate backup disc first.
    3. You should condense data more than two years old.
    4. Always keep data from the current year and the prior year in the file.
    5. Condense data summarizes the transactions for each account made prior to the date you entered, then erases the transactions themselves.
  6. Accountants Review Copy:
    1. Used to create a duplicate copy of your QB file for your accountants review.
    2. You can continue to use your QB file for your daily bookkeeping tasks.
    3. You accountant can make entries into his copy that can later be merged into your copy.
  7. Print Forms:
    1. Used to access any of the lists of forms (checks, invoices, etc.) that have been created and are waiting to be printed.
  8. Printer Setup:
    1. Used to set default printers for different tasks (dedicated check printers, for example)
    2. To change default check font from the default 9 point Times New Roman to a larger font:
    3. Menu Path = File | Printer Setup
    4. Form Name = Check/Paycheck
    5. Select Fonts
    6. Select Font button
    7. Select Arial, 11 pt
    8. Select OK twice
 
14. EDIT MENU
  1. Most of the Edit menu is self-explanatory.
  2. The Edit Menu selections will change depending upon which type of document you have on the screen.
  3. Memorize: Use to add the currently displayed transaction to the memorized transaction list for future re-use.
  4. Change Account Color: Use to change the color of any ledger or check. Used most often to match check colors on screen to actual checks colors.
Continued on next page... 
 QuickBooks Template Users Guide Page 4 
  1. Preferences:
    1. Used to control how QB operates.
    2. Select Edit | Preferences on the menu.
    3. Under General | My Preferences
      • Pressing Enter moves between fields = Checked
      • Automatically place decimal point = Unchecked
      • Automatically recall last transaction for this name = Unchecked
      • Hide Qcards for all windows = Checked
    4. Under Desktop View | My Preferences
      • Multiple Windows = On
    5. Under Accounting | Company Preferences
      • Use account numbers = Checked
      • Show lowest subaccount only = Checked
      • Require accounts = Checked
      • Use class tracking = Checked
 
15. VIEW MENU
  1. Most of the commands under the View Menu are self-explanatory.
  2. You can turn the top Icon Bar on or off. When it's visible, you can customize it with the commands you use most often.
  3. The formed Navigation Bar has been renamed the Shortcut list. Like the Icon Bar, you can turn it on or off. When it's visible you can also customize it.
  4. The Customize Desktop command simply opens the Display Preferences which allows you, among other options, to select a color scheme for QuickBooks.
 
16. LIST MENU - CHART OF ACCOUNTS
  1. The Chart of Accounts contains two basic types of accounts.
    1. Balance Sheet accounts that measure the money in storage any specific instance in time.
    2. P&L Accounts that measure the flow of money across a designated period of time.
  2. Follows Generally Accepted Accounting Principals (GAAP)
    1. 1000 Assets
    2. 2000 Liabilities & Equity
    3. 3000 Income
    4. 4000 Direct Costs (Cost of Goods Sold)
    5. 5000 Overhead (Expenses)
  3. Special Purpose Accounts
    1. 1080  Costs Pd by Third Parties:  Used to enter income and costs actually paid through checking accounts maintained by others (escrow, title companies, banks, property owners, etc.)
    2. 1090  Petty Cash:  Used to track petty cash.
    3. Using a petty cash account is the least recommended of the three available methods.
    4. 1110  Retainage Receivable:  Used to track retainage amounts due from customers.
    5. 1120  Rental Property Leases:  Used to track rental property.  Allows automatic billing at the 1st of each month, tracking of who’s not paid.
    6. 1350  Loans Made to Principals:  Used to track money you may have borrowed from the company.
    7. 1900 - 1999  Depreciated Assets:  Used to enter value of fixed assets that have been fully depreciated for tax purposes.
    8. 2010  Retainage Payable:  Used to track retainage amounts withheld from subcontractors and suppliers.
    9. 2040  Open Purchase Orders:  Used to post purchase orders as bills to force entry into the job cost reports.
    10. 3990  Perm Uncategorized Income:  Used to enter beginning balances when 1st setting up the file.
    11. 3999  Temp Uncategorized Income:  Used to temporarily code income to be correctly categorized at a later date.
    12. 4990  Perm Uncategorized Construction Costs:  Used to enter beginning balances when 1st setting up the file.
  1. Special Purpose Accounts continued...
    1. 4999  Temp Uncategorized Construction Costs:  Used to temporarily code direct construction costs to be correctly categorized at a later date.
    2. 5999  Temp Uncategorized Overhead:  Used to temporarily code overhead expenses that will be correctly re-categorized at a later date.
    3. 6011  Checks Cashed by Owner:  Used to record otherwise un-explained checks cashed by Owner.
 
17. LIST MENU - ITEM LIST
  1. All Items are connected to an account on the COA.
  2. Income items are used to assign invoice charges to income accounts. (Because we don’t have a choice)
  3. Please do not use Items for Job Cost Coding.
 
18. LIST MENU - CLASS LIST
  1. Used to distinguish between procurement methods.
  2. Classes used:
    1. Labor (Payroll)
    2. Materials
    3. Subcontract
    4. Rental
  3. Do NOT add any additional classes (i.e. Fees, etc.)
  4. Do NOT classify any expenditure if it does not fit one of these descriptions (like building permits, impact fees)(it’s OK to leave the Class blank).
  5. Do NOT classify income (leave blank)
 
19. LIST MENU - CUSTOMER:JOB LIST
  1. The Customer field at the top of the dialog box is for internal reference only.
  2. Create one customer for each project.
  3. You do not need to create jobs under each customer except as provided in 6 below.
  4. Creating a job under each customer (like the QB manual suggests) only makes your Customer:Job list unnecessarily long
  5. If you perform another job for the same customer, then enter that job as another Customer:Job with a new job number.
  6. You may wish to enter jobs under individual customers in the following circumstances:
    1. You are a subcontractor who performs multiple jobs for the same customer.
    2. You are performing a cost-plus project and you need to provide your customer with separate job cost for each change order, in which case you would create jobs under the customer named:
      • Main Contract
      • Change Order #1
      • Change Order #2, etc.
    3. You want to provide your customer with separate statements for the construction draws, the allowances, and the changes, in which case you would create three jobs under the customer:
      • Allowances
      • Main Contract (or Bank Draws)
      • Extras (or Change Orders)
  7. Customer/Job name format:
    1. Job Number, then...
    2. Customer last name, then...
    3. Single word description of job.
  8. Example Customer:Jobs names:
    1. 1044  Jones Residence
    2. 1047  Smith Addition
    3. 1065  321 Main Street Bldg
    4. 1068  Lot 43, Winding Hollow
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 QuickBooks Template Users Guide Page 5 
  1. If the customer is a husband and wife, enter both names in the First Name (i.e. Bill & Sue)
  2. The Billing address is the Customer’s current address.
  3. The Ship To address is the project’s address or legal description.
  4. These may in many instances be the same address.
  5. If possible, make a selection for Customer Type and Job Type.
  6. Use of other fields is optional and many may be left blank.
 
20. LIST MENU - VENDOR LIST
  1. Enter the Vendor’s full legal name in the Avendor field at the top of the dialog box.
  2. Account Number is the account number the vendor has assigned to your account.
  3. Terms should be left blank.
  4. Tax ID is the vendor’s Social Security Number or FEIN.
  5. Check Vendor Eligible for 1099 if applicable. Note: This setting may be made later or changed at any time.
  6. Enter insurance expiration dates beginning with the three letter abbreviation for the month. Example: NOV/12/99 or AUG/23/00
 
21. LIST MENU - OTHER NAMES LIST
  1. Everybody you transact business with must be entered on one of the four QuickBooks Lists.
  2. This list is for names that doesn’t fit the other three lists.
  3. Example of Other Names:
    1. The IRS and other tax authorities.
    2. Loans to other than vendors, customers or employees.
    3. Voided check / Stopped check / Returned check.
    4. Credit card providers.
  4. You can move a name from the Other Names list to any of the three other lists, but not the reverse.
 
22. LIST MENU - PROFILE LISTS
  1. Customer Type List
    1. Used to filter reports based upon types of customers.
    2. Example Customer Types:
      • Homeowner
      • Commercial Tenant
      • Condo Association
      • Government Agency
  2. Vendor Type List.
    1. Used to filter mailing lists.
    2. Example Vendor Types:
      • Lumber supplier
      • Electrician
      • Framing Carpenter
  3. Job Type List
    1. Used to filter reports based upon types of projects.
    2. This is useful to compare profitability of different types of projects. Example: New Homes vs Remodeling
    3. Example Job Types:
      • Custom Home
      • Spec Home
      • Room Addition
      • Commercial
  4. The remaining lists are self-explanatory.
 
23. LIST MENU - TEMPLATES
  1. Templates are forms you can create, modify, and save for different purposes.
  2. You can make template forms from Invoices, Estimates, Purchase Orders, Credit Memos and Statements.
  3. Templates allow you to select fields, move fields around, draw lines, change fonts, etc.
 24. COMPANY MENU
  1. Company Information
    1. Used to enter company name, address as you wish it to appear on reports, invoices, etc.
    2. Add company phone and fax numbers on the last line of the address to facilitate their appearance on all invoices, purchase orders, etc.
  2. Set up Users and Passwords:
    1. Used to enter master password and sub-passwords.
    2. Needed to utilize "freezing" of prior bookkeeping periods.
    3. Password protection not required in single-user environment.
  3. Setup Budgets.
    1. Budgets are target numbers only. They have no effect on your tax or financial reports.
    2. You may enter budgets for anticipated income as well as expected job costs.
    3. You may also enter budgets for overhead expenditures, which allows you to monitor overhead expenses by month.
    4. Procedure:
      • Menu Path = Company | Setup Budgets
      • Select account (Job Cost Code)
      • Select Customer/Job
      • Leave class blank
      • Enter budget amount in January of year job started.
      • Select Save to continue entering additional budgets.
      • Select OK to save and close the dialog box.
  4. Make Journal Entry
    1. Used to make bookkeeping entries that don’t result from transactions, for example:
    2. Opening Balances / Balances carried forward.
    3. Depreciation / Casualty write-offs.
    4. Should be used in conjunction with your accountant’s advice.
 
25. CUSTOMERS MENU
  1. Create Invoices
    1. Create invoices for all payments received from customers, INCLUDING situations where you already have the check in hand (like when you receive a deposit check or a bank draw)
    2. Use the item that corresponds to the correct income account.
    3. Example: Item #3300 Remodeling = Account #3300 Remodeling
    4. Write separate invoices for different charges. (Draws, Change Orders, Allowances, etc.)
    5. Keep each invoice to a single issue.
    6. Always enter a single line description of the invoice charge into the memo field.
    7. Example: Roof Draw
  2. Create Estimates
    1. Do not use QuickBooks Pro to do estimates:
    2. It’s not powerful enough for the typical builder.
    3. Use estimates only to enter a draw schedule in the event you want to use the progress billing feature.
  3. Create Credit Memos and Refunds
    1. Use to make adjustments to a customer’s account.
    2. Allowance credit. (Actual allowance cost was less than contract allowance)
    3. Negotiated settlements at end of job (you got screwed)
  4. Create Statements
    1. Provides a summary of all your transactions with a specified customer.
    2. Great tool for reminding customer of where you are with respect to draws, allowances, extras, etc.
    3. Perfect for settling up at the end of the project.
    4. Do one customer at a time, on an as-needed basis.
    5. See Section 38 for more information on using Statements.
    Continued on next page... 
 QuickBooks Template Users Guide Page 6 
  1. Receive Payments
    1. Use to deposit money received from Customers.
    2. Use to apply a customer payment to an outstanding invoice.
    3. Always enter "Payment Received" into the memo line.
    4. Will automatically deposit the payment into the designated checking account.
 
26. VENDORS MENU
  1. Enter Bills
    1. Enter vendor bills as they are received.
    2. Date is the date on the bill, NOT the date you posted it.
    3. Reference No. is the bill / invoice / ticket number.
  2. Pay Bills
    1. Use to select bills for payment.
    2. Always set to Show All Bills and Sort by Vendor.
    3. QB will create the checks and send them to the Checks to be Printed list to wait until you actually want to print them.
  3. Create Purchase Orders.
    1. Not recommended for most builders because the additional paperwork.
    2. Some builders use a limited PO system to control multi-payment subcontractors (electrician, plumber, framers, etc.)
    3. Please see the Special Procedures section of this guide for more information on using Purchase Orders.
  4. Inventory
    1. The Inventory function is not used by Builders.
 
27. BANKING MENU
  1. Write Checks
    1. This is self-explanatory.
    2. Enter class in the far right column (if applicable).
    3. Don’t use this to write checks to pay bills in Accounts Payable (that’s what Pay Bills is for)
    4. Don’t use this function to write checks to pay off payroll liabilities (Tax Deposits, SUTA returns, etc.) (Use Employees | Payroll | Pay Liabilities)
  2. Make Deposits
    1. Do not use to deposit money from customers for projects. (use Receive Payments instead)
    2. Use to deposit money received from:
      • The sale of an asset.
      • A loan check.
      • A refund from Vendor.
      • To Transfer Funds.
  3. Transfer Funds
    1. Use to move money between accounts (checking to savings, etc.).
    2. Do not use if the transaction was conducted by check.
  4. Enter Credit Card Charges
    1. Use to enter credit card charges.
    2. Be sure to select the correct credit card account each time.
    3. Identical to entering a bill.
  5. Reconcile
    1. Used most commonly to reconcile checking accounts.
    2. Any Balance Sheet account can be reconciled.

 REPORTS
 
28. GENERAL
  1. You can create almost any report you may need by selecting the correct basic report and using customize and filters.
  2. You should explore the possibilities and experiment with the options.
  3. Nothing you do to a report will change the underlying data.
 29. USING TEMPLATE REPORTS
  1. The term Template Reports is not a QuickBooks term and it is not in the QB manual
  2. Template Reports are memorized reports you’ve customized and formatted but have not filtered or titled.
  3. Template Reports are useless until you filter and title them.
  4. Template Reports are used to save time because you’ve already set them up, they just need to be filtered and titled.
  5. Procedure for using a Template Report:
    1. Remember procedure FTM (Filter-Title-Memorize)
    2. Menu Path = Reports | Memorized Reports
    3. Select the desired Template Report
    4. Modify Report | Filter | Name = Customer/Job
    5. Modify Report | Header/Footer | Report Title = Job Name and Title of Report
    6. Memorize as a New report. (Remember: You don’t want to replace the template report because you’ll want to use it again)
    7. Enter memorized report name: Use the suggested name, which is the same as the report title.
 
30. INSURANCE EXPIRATION DATE REPORT
  1. From standard QB lists report:
    1. Menu Path = Reports | List | Vendor Contact List
    2. Select Modify Report | Display, then select only the following columns:
      • Vendor
      • Vendor Type
      • W/C Expire Date
      • Ins. Agent Phone
    3. Select Header/Footer
    4. Report Title W/C Expiration Date Report
    5. Select Memorize
  2. To filter for a specific month:
    1. Select Filters
    2. Select W/C Expire Date
    3. Enter three letter abbreviation for desired month.
 
31. VENDOR 1099 INFORMATION REPORT
  1. From standard QB lists report:
    1. Menu Path = Reports | List | Vendor Contact List
    2. Select Modify Report | Display, then select only the following columns:
      • Vendor
      • Vendor Type
      • Tax ID
      • Eligible for 1099
    3. Select Header/Footer
    4. Report Title = Vendor 1099 Report
    5. Select Memorize
 
32. PROJECT P&L REPORTS
  1. From standard QB report:
    1. Menu Path = Reports | Company & Financial | Profit & Loss Standard
    2. Dates = All
    3. Modify Report | Display | Columns | % of Income = Checked
    4. Modify Report | Filter | Name = Customer/Job
    5. Modify Report | Header/Footer | Report Title = Job Name Profit & Loss
    6. Memorize if desired.
  2. From a pre-memorized Template Report:
    1. Remember procedure FTM (Filter-Title-Memorize)
    2. Menu Path = Reports | Memorized Reports
    3. Select Template - Job Profit and Loss
    4. Modify Report | Filter | Name = Customer/Job
    5. Modify Report | Header/Footer | Report Title = Job Name Profit & Loss
    6. Memorize in accordance with Template Report procedures.
Continued on next page... 
 QuickBooks Template Users Guide Page 7 
33. JOB COST VARIANCE REPORTS
  1. From standard QB report:
    1. Remember procedure FTM (Filter-Title-Memorize)
    2. Menu Path = Reports | Budget | P&L Budget vs Actual
    3. Dates = Manually enter from "1-1-1990" to "1-1-2010"
    4. Columns = Customer/Job
    5. Modify Report | Filter | Name = Customer/Job name
    6. Modify Report | Header/Footer | Report Title = [Job Name] Job Cost Variance Report
    7. Memorize if desired.
  2. From a pre-memorized Template Report.
    1. Remember procedure FTM (Filter-Title-Memorize)
    2. Menu Path = Reports | Memorized Reports
    3. Select Template - Job Cost Variance Report
    4. Modify Report | Filter | Name = Customer/Job name
    5. Modify Report | Header/Footer | Report Title = [Job Name] Job Cost Variance Report
    6. Memorize in accordance with Template Report procedures
 
34. JOB COST BY CLASS
  1. From standard QB report:
    1. Menu Path = Reports | Company & Financial | Profit & Loss Standard
    2. Dates = All
    3. Columns = Class
    4. Modify Report | Filter | Name = Customer/Job
    5. Modify Report | Filter | Account = All cost-of-sales accounts
    6. Modify Report | Header/Footer | Report Title = [Job Name] Job Cost by Class
    7. Memorize if desired.
  2. From a pre-memorized Template Report:
    1. Remember procedure FTM (Filter-Title-Memorize)
    2. Menu Path = Same as #34-1 for Standard P&L Report.
    3. Select Template - Job Cost by LMSR
    4. Modify Report | Filter | Name = Customer/Job
    5. Modify Report | Header/Footer | Report Title = [Job Name] Job Cost by Class
    6. Memorize in accordance with Template Report procedures.
 
35. COMPLETED CONTRACTS REPORTS
  1. To establish Income, Direct Costs and Gross Profit for the tax period:
    1. Menu Path = Same as #34-1 for Standard P&L Report.
    2. Dates = All
    3. Modify Report | Filter | Name | Selected Names... = Select all projects that were completed in the prior tax period.
    4. This report will give you your total income and direct costs for the selected projects, with the difference being your gross profit.
  2. To establish you Overhead expenses for the tax period:
    1. Menu Path = Same as #34-1 for Standard P&L Report.
    2. Dates = The tax period (typically the past year)
    3. Modify Report | Filters | Accounts = All ordinary expense accounts
    4. This report will establish your overhead expenses for the tax/calendar year.
  3. To establish your Work in Process and Construction Draw Liabilities:
    1. Menu Path = Same as #34-1 for Standard P&L Report.
    2. Dates = All
    3. Modify Report | Filters | Name | Selected Names... = Select all the current ongoing projects.
    4. This report will give you your total income and direct costs for the selected projects.
    5. The income is your Construction Draw Liabilities
    6. The directs costs total is your Work in Progress.

 SPECIAL PROCEDURES
 
36. WRITING INVOICES
  1. Writing Invoices is the 1st phase of using Accounts Receivable.
  2. You should use Accounts Receivable and write invoices for every project, including speculative homes, because:
    1. It allows you to monitor who owes you money (including the bank draws).
    2. It prevents you from forgetting about getting paid for change orders and other small additional amounts.
    3. You can mange your customer allowances.
    4. You can manage the bank's draw schedule.
    5. You can create complete statements for any customer summarizing every draw, change order, extra work order, allowance purchase, bank payment and customer payment, and most importantly the balance owed.
  3. To write an invoice:
    1. PLEASE NOTE: These instructions are based upon using the Accounts and Items that are pre-installed in your QuickBooks Pro Template Files. If you are not using the Template File, then you will need to create the accounts and items described herein.
    2. Menu Path = Customer | Create Invoices
    3. Customer:Job = The Project
    4. Class = LEAVE BLANK! (Do not classify invoices)
    5. Account = Select the A/R Account (typically #1100)
    6. Form Template = Customized Invoice (or other customized invoice)
    7. Owner Address = Automatically displayed (unless you haven't entered it into your Customer List)
    8. Date = Today's date
    9. Invoice Number = Let QB number these consecutively (in other words don't try to get fancy with special invoice numbers that incorporate the project number, etc. or you'll be sorry later)
    10. Project Address = Automatically displayed from the "Ship To" address (unless you haven't entered it into your Customer List)
    11. Terms = Leave blank (unless you have any terms other than "Due Now")
    12. Due Date = Same day as the invoice (unless you have any terms other than "Due Now")
    13. Item = Select one of the items numbered in the 3000 range, as follows:
      • Item #3000 is connected to account #3000 Construction Revenue, which is an income account on the Chart of Accounts.
      • Item #3100 is connected to account #3100 Land/Lot Sales, which is an income account on the Chart of Accounts.
      • Item #3200 is connected to account #3200 Residential Construction, which is an income account on the Chart of Accounts.
      • These items are all connected to income accounts on the Chart of Accounts.
      • If you're not sure - use item #3000.
      • DO NOT select an item that is connected to a cost code!
      • DO NOT select an item that is under the 4000 numbers (these are connected to cost codes)
    14. Description = This will automatically be the description of the item you selected. For example:
      • Item #3000 description is "Construction Revenue"
      • Item #3100 description is "Land/Lot Sales"
      • These descriptions are only to remind you that you have selected the correct item.
    15. Erase / overwrite the automatic description with something more appropriate, for example:
      • Roof Draw as per contract.
      • Lighting Fixture allowance adjustment.
      • Change Order #434556 dated 3/4/01 for upgrade shingles.
 QuickBooks Template Users Guide Page 8 
    1. Amount = The amount to be billed.
    2. Customer Message = Pick something from the Customer Message List if you wish.
    3. To be printed = Checked if you actually need to print the Invoice, unchecked if you don't need to print the invoice (like with bank draws).
    4. To be sent = Unchecked unless you think you can actually email an invoice to a customer.
    5. Memo = ATTENTION - THIS IS IMPORTANT - Enter a short, one line summary of the nature of the invoice. Typically you can simply cut and paste the description from the body of the invoice.
  1. You need to create an invoice for all money you receive from a customer or on behalf of a customer (like bank draws)
  2. You DO NOT need to PRINT an invoice unless the customer is expecting to receive one. For example, banks don't need an invoice, so there's no need to print an invoice for a bank draw.
  3. You may write whatever you wish into the body of an invoice, you only need an item number on those lines where you want to enter an amount.
  4. You may add as many line items as you wish to an invoice, but we strongly suggest that you keep your invoices to single issues.
  5. It's better to send three separate invoices for different items than it is to send one invoice with three items. If the customer has a dispute with one line item, they can still pay the other two invoices. Get the idea?
 
37. RECEIVING PAYMENTS
  1. Receiving Payments is the 2nd phase of using Accounts Receivable, and is the process of applying a payment to an open invoice.
  2. You must have 1st created an invoice before you can apply a payment.
  3. You must create a invoice for all money you receive from a customer or in behalf of a customer (like bank draws).
  4. You must create an invoice even if you already have the customer's check in you hand.
  5. To Receive a Payment against an invoice:
    1. Menu Path = Customer | Receive Payment
    2. Account = Select the A/R Account (typically #1100)
    3. Customer:Job = The Project
    4. Date = The date you received the check or payment (typically today's date, but let's be accurate)
    5. Balance = Automatically displays the total amount of all outstanding invoices to that customer for that project.
    6. Payment Method = Select from the Payment Method List or enter. (Don't skip this step, it will make settling up with the customer at the end of the project so much easier.
    7. Ref./Check No. = Enter the check number. If you don't know, then enter "unknown". At lease enter something so when you review your reports you can see that you didn't forget to enter the number, you just didn't record it.
    8. Card No. = Irrelevant unless you accept credit card payments
    9. Memo = VERY IMPORTANT
      • Always enter the same thing on every payment you receive.
      • Example #1 = "Payment Received"
      • Example #2 = "Payment Received on Account"
      • DO NOT try in any way to be description or to enter a memo that describes what the payment is paying.
      • NOTE: The above is exactly the opposite of what you do in an invoice, where you should be descriptive in the memo line.
    10. Select the invoice(s) that are being paid by this payment. You may apply a payment to one or several invoices, and you may apply it to pay part of an invoice.
    11. Unapplied Amount = Will display the amount of the payment that has not been applied to an invoice (helpful when applying a payment to multiple invoices.
    12. Deposit To = Select the desired bank account.
 38. CREATING STATEMENTS
  1. Creating Statement is the 3nd phase of using Accounts Receivable.
  2. Creating Statements is used to create a statement of all your transactions with a customer, including:
    1. The invoice for the customer's original deposit.
    2. Invoices for the Contract Draws / Bank Draws.
    3. Invoices for Allowance Schedule adjustments.
    4. Invoices for Change Orders and/or Extra Work Orders.
    5. Checks received from the customer.
    6. Checks received from the banks in behalf of the customer.
    7. Most important of all: The current balance on the account.
  3. To Create a Statement:
    1. Menu Path = Customer | Create Statement
    2. A/R Account = Select the A/R Account (typically #1100)
    3. Print Format = Customized Statement (unless you've customized your own statement.
    4. Dates From &: To = The date range must be entered carefully, as follows:
      • You MUST manually enter a date range that is bigger than the project because you want the statement to include all the financial transactions for the project.
      • The start date should be before the project started, preferably something like 1-1-1990.
      • The ending date can be today, or it can be any time into the future.
    5. For Customers = Select "One Customer"
    6. One Customer = The Project
    7. Print Statement = For Each Customer
    8. Select Preview to review the statement prior to printing it.
  4. The Statement is a great tool for settling up with the customer at the end of the project.
 
39. COST-PLUS BILLING
  1. Do not do it like QB manual describes.
  2. Enter bills and checks according to standard procedures.
  3. Each billing period (week, bi-monthly, etc.) prepare a job cost transactions report:
    1. Filtered by Name (Customer/Job)
    2. Filtered by Entered/Modified for applicable billing range dates.
  4. Attach report to invoice with the description "Construction costs from [date] to [date] as per attached report"
  5. Add additional line items to the invoice for markup.
 
40. PROGRESS BILLING
  1. QB will track your draws, what you’ve already billed, and what you have remaining.
  2. Progress billing works with a Schedule of Values or a fixed draw schedule.
  3. To use Progress billing:
    1. Use a QB Estimate to enter the draw schedule.
    2. Select Customers | Create Invoices.
    3. Select project.
    4. Select Yes at Customer has estimate...
    5. Select Create invoice for selected items or for different percentages of each item.
    6. Show Quantity and Rate = Checked
    7. Show Percentage = Checked
    8. Enter percentage or amount of desired draws.
    9. Select OK to create invoice.
  4. You may append the original draw schedule by:
    1. Changing the draw amounts.
    2. Adding change orders as additional draws.


Continued on next page... 
 QuickBooks Template Users Guide Page 9 
41. TRACKING CUSTOMER ALLOWANCES
  1. QB will track your customer’s actual allowance expenditures against budgeted allowance amounts (by cost code).
  2. This report may be produced at any time for the customer’s review.
  3. The procedure is as follows
    1. Enter each Allowance amount as a budget in QB corresponding to the correct cost code.
    2. Post bills and write checks as normal.
    3. At any time you may open an standard Job Cost Variance Report and filter it by Selected Accounts and then individually select the allowance cost codes.
    4. The resulting report will compare the known expenditures vs the budgeted amount, with a running balance.
  4. QB will also track what allowances you have billed the customer, what remains unbilled, and the status of all open and paid invoices.
  5. This procedure is conducted in the Accounts Receivable portion of QB, as follows:
    1. Create a Job named Allowances under the Customer in the Customer/Job list.
    2. Note: This procedure may result in the existing transactions being placed in another Job under the customer.
    3. Each time you invoice the customer for an allowance schedule item, make sure the invoice is assigned to the Job named "Allowances" under the customer name.
  6. At any time, you may create a Statement summarizing the allowance charges and payments received for the customer’s review.
  7. This statement may be filter just for the Job named "Allowances", or it may be a section of a more comprehensive statement encompassing the entire project.
 
42. ENTERING JOB BUDGETS
  1. Because you are using Accounts instead of Items, your Job Cost Budgets are entered as Budgets, NOT as Estimates.
  2. Entering Budgets:
    1. Menu Path = Company | Setup Budgets
    2. Budget for Fiscal Year = The year the project started
    3. Account = Cost Code
    4. Customer:Job = Select the project.
    5. Class = LEAVE BLANK!
    6. Month = Select January
    7. Budget Amount = The construction budget for that cost code for the entire project.
    8. Save Button = Will save the budget number AND leave the dialog box OPEN so you can to select and enter additional budget numbers.
    9. OK Button = Will save the budget number and CLOSE the dialog box.
  3. Revising Budgets:
    1. Menu Path = Company | Setup Budgets
    2. Budget for Fiscal Year = The year the project started
    3. Account = Cost Code
    4. Customer:Job = The project you are revising the budget for.
    5. The dialog box will display the current budget in the right side columns.
    6. Revise the existing budget as desired.
    7. Save Button = Will save the revised budget number AND leave the dialog box OPEN so you can to select and enter additional budget numbers.
    8. OK Button = Will save the revised budget number and CLOSE the dialog box.
  4. To review the entire budget for a project, simply run a Job Cost Variance Report filtered by the project.
 43. USING PURCHASE ORDERS
  1. Instituting a full purchase order system will create a lot of additional work for you and your staff.
  2. Many builders use QB without using purchase orders at all.
  3. A good compromise is to use purchase orders for major purchase with lengthy lead times (trusses, cabinets, etc.) and to track multi-payment subcontractors (Plumbers, electricians, etc.)
  4. If you want to use a purchase order system, consider these options:
    1. Consider using hand written purchase orders to authorize small field purchases.
    2. Don’t attempt to enter every line item from a quotation into a purchase order. Instead, make one entry to summarize the quotation, as follows:
      • Framing package as per attached quote OR
      • Masonry work as per attached proposal.
  5. Don’t enter purchase orders for zero amounts.
  6. Use COGS and/or expense items only on purchase orders.
  7. Don’t accidentally assign income items (3000-3999) to purchase orders.
 
44. TAKING DISCOUNTS FROM BILLS
  1. Select Vendors | Pay Bills
  2. Select a bill to pay.
  3. Select Discount Info
  4. Amount of Discount = The amount you want to deduct
  5. Discount Account = 3960 - Discounts Taken
 
45. COSTS PAID by 3rd PARTIES
  1. This describes situations where some or all of the construction costs were paid directly to the vendor by a third party, typically the owner or the lender.
  2. This situation includes:
    1. Payments made by owners, lenders or escrow agents directly to your suppliers.
    2. Allowance deposits paid by owners directly to your suppliers.
    3. Funds disbursed by title companies to pay closing expenses at settlement.
  3. You cannot simply ignore these payments because:
    1. Your Job Cost reports will be inaccurate because of missing costs.
    2. Your transaction history with your vendor will be incomplete.
    3. Your Accounts Payable will be inaccurate because the bills paid by the 3rd party will still show as unpaid.
    4. Your customer's statement and payment history will be imcomplete.
    5. Your Accounts Receivable will be inaccurate because some invoices that have actually been paid will show as unpaid.
  4. Entering costs paid by 3rd parties is easy once you understand the concept.
  5. To facilitate the procedure we will use account #1080 Costs paid by 3rd Parties on the QuickBooks Template Chart of Accounts.
  6. Account #1080 is a fake bank account: There is no bank, there are no checks, there is NEVER a remaining balance.
  7. Yes, we could also use General Journal entries to adjust the project's income and costs to reflect the costs paid by 3rd parties, but that procedure WOULD NOT remove bills from the QuickBooks A/P or invoices from the A/R.







    8. Continued on next page... 
 QuickBooks Template Users Guide Page 10 
  1. The procedure is as follows:
    1. Enter all vendor bills and write all customer invoices in accordance with standard procedures.
    2. When the customer (or the other 3rd party) pays one or your costs, you pretend that the funds were paid directly to you instead, as follows:
      • You use the "Receive Payments" function to apply the exact amount of the 3rd party payments against one or more of the project's open invoices using the same date and actual check numbers as the 3rd party payments.
      • You deposit the received payment into the fake bank account #1080.
    3. This procedure will result in:
      • The funds will show as income for the project.
      • The customer invoices will show as paid (or partially paid).
      • The customers statement will reflect the credit for the funds paid to the subcontractors and suppliers.
      • You will have a balance in bank account #1080.
    4. The next step is to "pay" the project's bills, as follows:
      • Use the Vendors | Pay Bills function to select the bills that were paid by the 3rd party.
      • Payment Account = Account #1080
      • Payment Method | Assign Check No = Checked.
      • Payment Date = Same date as the actual checks that were written
      • After you select "OK" to record the checks, a dialog box will appear where you can enter the actual check numbers that were written by the 3rd party.
    5. This procedure will result in:
      • The funds will show as costs for the project.
      • The vendor bills will show as paid (or partially paid).
      • Your transaction history with the vendor will be accurate.
      • The balance in bank account #1080 will be reduces (hopefully to zero).
  2. If there were any costs that were not entered as bills, then pay them by simply writing a check in account #1080 just like you would any other job cost.
  3. Funds disbursed at settlement should be entered using the same procedures. this will get such costs as closing costs, sales commissions, ect. in your job cost reports.
  4. These procedures should be done in batches, with the "deposit" equaling the "checks" every time.
  5. There should NEVER be a balance in account #1080 upon the conclusion of these procedures.
  6. These procedures will have no effect on your profitability or your tax liability because the income will equal the costs.
 
46. LOANS and LOAN PAYMENTS
  1. Each loan should be given it’s own account number on the Chart of Accounts.
  2. Loan payments should be split between the principal and interest using an amortization schedule from the lender.
  3. As a practical matter, you may wish to use a memorize a loan payment with the same principal/interest split for the 1st 11 months of a year, and use the last payment of each year to make adjustments to the totals for the entire year.
 
47. ENTERING FIXED ASSETS
  1. As beginning entry:
    1. Menu Path = Banking | Make Journal Entry
    2. Date = Beginning date of this set of books.
    3. Entry No. = Fixed Assets
    4. Account = 1800 to 1840, select to match category of asset.
    5. Enter asset value as credit.
    6. Memo = Name and serial number of asset.
      • Example: CTX Laptop #5406AR33
      • Example: Makita Table Saw #MK5075343
  1. Entering Fixed Assets as beginning entry, cont....
    1. Move down to next line of entry.
    2. Account = 2900 Owners Equity
    3. Enter corresponding amount as debit.
    4. Continue until all assets are entered.
  2. When purchased by check, credit card or charged on account.
    1. Select the split window of the transaction.
    2. Account = 1800 to 1840 (select to match category of asset).
    3. Amount = Purchase price of asset.
    4. Memo = Name and serial number of asset.
      • Example: CTX Laptop #5406AR33
      • Example: Makita Table Saw #MK5075343
 
48. ENTERING DEPRECIATION
  1. Depreciation is the reduction of the value of an asset over time.
  2. Depreciation is an expense, but not a cash expense.
  3. In other words, you do not actually receive a bill for depreciation or write a check for depreciation.
  4. Nevertheless, your fixed assets do loose value over time, and you are entitled to deduct that loss of value as an expense.
  5. Within certain parameters, you can manipulate your net profit by varying the amount of depreciation you take.
  6. Depreciation rules can be complicated and generally you should rely on your tax advisor’s advice when calculating depreciation.
  7. Entering depreciation as general journal entry:
    1. Menu Path = Banking | Make Journal Entry
    2. Date = Last day of tax year.
    3. Entry No. = Depreciation
    4. Account = 1800 to 1840 (select to match category of asset)
    5. Enter depreciation amount as credit.
    6. Memo = Name and serial number of asset.
    7. Name = [tax year] Depreciation (entered as Other Name)
    8. Example: 1999 Depreciation
    9. Class = Leave blank
    10. Move down to next line of entry.
    11. Account = 2900 Owners Equity
    12. Enter corresponding amount as debit.
 
49. TRACKING VENDOR INSURANCES
  1. There are several strategies you can employ to track the expiration dates of your vendor’s Workers Compensation, General Liability, Vehicle and other insurances.
  2. You can record the expiration dates of various insurances by creating custom fields in the vendor database. Enter the expiration date using the first three letters of the month instead of the month number. For example: NOV/12/99 or AUG/01/99
  3. You can create a list report of your vendors that included one or more of these fields.
  4. You can then filter the report on one of these fields to produce a report of vendors who’s insurance is to expire within a certain month. Set the filter for just the three letters of the desired month.
  5. You can also set reminders for individual vendors to activate like an alarm on or before the expiration date.
 
50. USING MICRO PAYROLL
  1. The Micro Payroll procedure is a simplified payroll process that incorporates memorized paychecks.
  2. This procedure is suitable for situations where there are only one or two employees, all of whom work in overhead functions.
  3. The procedure is as follows:
    1. Create and memorize a paycheck for each employee.
    2. Pay is assign to the corresponding overhead account (Office/Clerical, Owner’s Salary, etc.)
    3. FICA and tax withholdings are coded to the corresponding liability accounts as negative numbers.
 QuickBooks Template Users Guide Page 11 
  1. Using Micro Payroll, cont...
    1. Memorize the check, and use it each pay period to pay the employee.
    2. You may change the memorized amounts as needs may require (short payweek, change in pay rate, etc.)
  2. Pay withholdings by check, crediting the corresponding liability accounts as required.
 
51. BALANCE SHEET for COMPLETED CONTRACTS
  1. To establish Income, Direct Costs and Gross Profit for the tax period:
    1. Menu Path = Reports | Company & Financial | Profit & Loss Standard
    2. Dates = All
    3. Filters = Name | Selected Names...
    4. Select all projects that were completed in the prior tax period.
    5. This report will give you your total income and direct costs for the selected projects, with the difference being your gross profit.
  2. To establish you Overhead expenses for the tax period:
    1. Menu Path = Same as #51-1-a for Standard P&L Report
    2. Dates = The tax period (typically the past year)
    3. Filters | Accounts = All ordinary expense accounts
    4. This report will establish your overhead expenses for the tax/calendar year.
  3. To establish your Work in Process and Construction Draw Liabilities:
    1. Menu Path = Same as #51-1-a for Standard P&L Report
    2. Dates = All
    3. Filters = Name | Selected Names...
    4. Select all the current ongoing projects.
    5. This report will give you your total income and direct costs for the selected projects.
    6. The income is your Construction Draw Liabilities
    7. The directs costs total is your Work in Progress.
  4. To enter your Work in Process and Construction Draw Liabilities into your Balance sheet:
    1. Menu Path = Banking | Make Journal Entry
    2. Date = Today.
    3. Entry No. = Leave Blank
    4. Account = 4000 Construction Costs - enter as Credit.
    5. Account = 1790 Work in Progress - enter as Debit.
    6. Account = 2390 Construction Draw Liability - enter as Credit.
    7. Account = 3000 Income - enter as Debit.
    8. Select OK.
    9. Print balance sheet report.
    10. Delete the above general journal entry after printing the balance sheet report.
 
52. CLOSING out REPORTING PERIODS
  1. Officially closing an accounting period was a necessity back in the days when books were kept with pencil and paper.
  2. Computer bookkeeping programs allow more flexibility.
  3. QuickBooks does not require you to Close accounting periods.
  4. The overwhelming number of users prefer to the benefits of being able make retroactive changes as the need becomes necessary.
  5. Nevertheless, there are certainly situations wherein you would want to prevent another user to accidentally change prior data without authorization.
  6. For example, many users would want to restricted changes to their QuickBooks entries after the numbers have been finalized for tax reporting.
  7. To prevent changes to previous date, use passwords to prevent changes to data on or before the date you set.
  8. This will prevent anyone else from making changes to the data.
 53. PRINTING LIEN RELEASES on CHECK STUBS
  1. If you are using the PowerTools QuickBooks Template, the Lien Releases described herein are already included in the Template File as an Invoice Template.
  2. Use one-check-to-a-sheet checks with the blank middle and bottom stub.
  3. Design a lien release in any word processing or spreadsheet file that prints on the middle check stub around where QB is going to print the information.
  4. Pre-print the lien release onto your blank checks.
  5. Whenever you print a check in QB, the lien release will already be on the check stub, ready for signature.
 
54. ENTERING HAND-WRITTEN CHECKS
  1. You may enter checks that were hand-written or written in another program into your check ledger at any time, by either of these two methods:
    1. You may enter it in the Write Check screen, OR
    2. You may enter it directly into the ledger.
  2. To enter the check in the Write Check screen:
    1. Menu Path = Banking | Write Checks
    2. Enter the actual check date and number.
    3. Enter the other information.
    4. Select OK to record the check.
  3. To enter the check in the check register:
    1. Menu Path = Lists | Chart of Accounts
    2. Select the correct bank account.
    3. The ledger will open with a new blank entry at the bottom.
    4. Enter the actual check date and number.
    5. Enter the other information.
    6. Select OK to record the check.
 
55. BOOKKEEPING TIPS
  1. Don’t create a job numbering system that incorporates the year the project was started and/or finished.
    1. There’s no governmental requirement that you have to incorporate the year in a project number.
    2. There is no governmental or insurance company report that requires you to incorporate a year in your project numbering system.
    3. Adding additional digits to a job number for no reason simply add keystroke work without any benefit.
  2. File Paid Bills by the Month
    1. Filing paid bills by the project or by the vendor requires too much sorting and filing with little benefit.
    2. Filing paid bills by the month is easy because all you do is file the paid bills in one folder once per month.
    3. 95% of all the information you might need from the actual bill is already entered into QB.
    4. In the rare event that you actually need to retrieve the original source document, all you need to do is flip through the monthly folder and find the paperwork.
  3. Use the Four Bin system to control paperwork.
    1. Put a shelf on the wall above your computer or make another convenient location accessible to your computer.
    2. Install and label four bins as follows:
      • Bin #1  Unopened Bills
      • Bin #2  Coded and Approved
      • Bin #3  Posted in QB
      • Bin #4  Paid
    3. As bills and similar notices are received from your vendors via mail or hand-delivered, they are deposited in Bin #1.
    4. As bills are examined, stamped and coded, they are moved to Bin #2. Note: This process may be performed by multiple personnel from Field Supervisors to Office Managers.

Continued on next page... 
 QuickBooks Template Users Guide Page 12 
  1. Four Bin System, continued...
    1. Bookkeeping periodically removes the bills from Bin #2, enters them into QB Accounts Payable, stamps each such bill with the Posted in A/P stamp, and deposits the bill to Bin #3 to await payment.
    2. On a periodic basis, typically once a week, bookkeeping should print an Unpaid Bills by Vendor report for management consideration.
    3. After bills are selected for payment that week, the checks are printed, and the bottom check stub is stapled to the source document and deposited in Bin #4.
    4. At the beginning of each month, collect all the paid bills from Bin #4 and insert them into an accordion envelope with the month and year written on the side. File as desired.
    5. Bills may move from one to another bin at any time. For example, a bill could get paid immediately and the original bill and the check stub deposited directly into Bin #4.
    6. With this system, everyone in the company knows where to look for any bill that’s still in your bookkeeping process.

 APPENDIX
 
56. TECHNICAL SUPPORT
  1. Technical Support is available online through our website at www.PowerTools Software.com and by email at support@PowerToolsSoftware.com.
  2. Customer Service issues related to bad CD's, replacement CD's, or non-functioning installation programs is available at all time without charge.
  3. Telephone Technical Support for using QuickBooks is provided when available at a rate of $1.00 per minnute.
  4. The full text of our Technical Support Policy is available at our website at www.PowerTools Software.com.
 
57. LEGAL DISCLAIMER
  1. The QuickBooks Template File is a tool for assisting you in setting up and using QuickBooks Pro for your company.
  2. The QuickBooks Template File, it's manual and this website ARE NOT legal dissertations, legal opinions, or legal advice.
  3. You, as the Program User, MUST REVIEW every report created by the Program for accuracy, completeness and correct use.
  4. You, as the Program User, MUST obtain the advice of an Attorney and an Accountant BEFORE implementing any of these strategies.
  5. You, as the Program User, accept ALL LIABILITY for the accuracy, correctness, correct use and correct application of the bookkeeping file, the bookkeeping records, and the reports created by you.
  6. PowerTools Software, Inc. accepts NO LIABILITY for the accuracy or correctness of the bookkeeping file, the documents, or for the correct use or application of the file, your bookkeeping records or any reports provided herein or created by the user, or for the contents of the program, it's manual, or the website.
  7. This is only a part of the full LEGAL DISCLAIMER, which is incorporated into the installation program and may also be viewed at www.PowerTools Software.com
 
WARRANTY
  1. Generally, our Warranty provides that the software and the distribution media (Installation CD or disc) will perform substantially as represented or we will replace it at our cost.
  2. The full text of our Warranty Policy is available at our website at www.PowerTools Software.com.
 
59. LICENSE
  1. The QuickBooks Template File is owned by PowerTools Software, Inc. and is licensed to you for your use under the terms and conditions of our License Agreement.
  2. The full text of our License Agreement is available at our website at www.PowerTools Software.com.
 
60. COPYRIGHT
  1. The QuickBooks Template File, it's manual and the contents of the website are copyrighted property and are protected by US and International Copyright Law.
  2. The full text of our Copyright is available at our website at www.PowerTools Software.com.