Project-specific expense tracking. Managing a wide range of materials and supplies. Calculating complex labor payroll and subcontractor invoices.
Construction companies and contractors face dozens of financial challenges. Luckily, you can solve these challenges and more with one construction accounting software: QuickBooks, Intuit’s financial and business management suite.
If you haven’t already started using QuickBooks for your construction company or contracting business, here’s a detailed look at why you need it and how it works.
The importance of using accounting software
Imagine cutting all your lumber with a hand saw, using a sandpaper sheet to smooth out the rough edges, and manually turning a brace to drive a bit into the wood. It would take days to finish a task that power tools could complete in a few hours — which is why most, if not all, companies use machines to streamline the construction process.
Think of QuickBooks as a power tool for your finances. When you write transactions by hand and do the math yourself, bookkeeping is a tedious chore. But QuickBooks’ tools and automations save you time and energy, giving you back the resources needed to focus on high-impact tasks and scale your business.
8 benefits of using QuickBooks for construction
Here are some benefits of this accounting solution’s wide range of features.
1. Streamlined financial administration
Accounting software like QuickBooks automates financial tasks, reducing manual entry and human error. QuickBooks uses automation to handle invoicing, payroll, and bill payments efficiently, freeing up time for you to focus on other business activities.
2. Better cash flow management
Every business should closely track cash flow, but it’s especially crucial in the construction industry, where project timelines and payments are so frequently in flux. QuickBooks’ construction software provides cash flow management for consistent visibility into your incoming and outgoing funds, allowing you to make informed decisions about project financing and resource allocation.
3. Accurate expense forecasting
One of the biggest benefits of accounting software is its ability to provide accurate financial forecasting. By analyzing past and present financial data, QuickBooks helps predict future income, expenses, and even losses. This lets you build a strategy and make choices based on facts — essential for long-term financial stability and growth.
4. Compliance with financial regulations
Even if your work is up to construction code, failing to comply with financial regulations can get your business into trouble. QuickBooks keeps track of every transaction and generates the necessary reports for tax filings, reducing the risk of non-compliance and penalties.
5. Improved reporting
Detailed and accurate financial reports offer insights into your business’s financial health. QuickBooks provides a variety of customizable reports regarding different aspects of your finances, like profit and loss summaries and pending sales. These reports help you project profitability, track expenses, and identify areas for improvement.
6. More informed decision-making
Every business owner occasionally has to make decisions without too much time to think. With QuickBooks, you access the information you need to make informed choices every day, whether you need to offer a quick job estimate or decide if you can afford to hire a new contractor. With real-time financial data at your fingertips, you can feel more confident about every business decision you face.
7. Simplified collaboration
Project management. Operations. Sales and estimating. If you have different individuals or teams handling these business activities, give them the tools they need to collaborate effectively. QuickBooks makes it easy by providing a centralized platform for real-time data access and customizable reports. When all authorized personnel have up-to-date financial and inventory information, coordination improves across all departments.
8. Data loss and error prevention
Any data loss or error can have significant consequences, so find a system you can trust to keep financial records accurate. QuickBooks offers robust data backup and recovery options to secure your information and safeguard against mistakes. This level of security is vital for maintaining accurate records over the long term, giving you peace of mind that your data is protected.
Which QuickBooks version is best for construction?
Now that Intuit has discontinued QuickBooks Desktop 2021, you have five choices for your construction company’s accounting software: QuickBooks Online, QuickBooks Enterprise, QuickBooks Enterprise with cloud access, QuickBooks Enterprise Diamond, and QuickBooks Contractor Edition. (QuickBooks Desktop 2022 and newer are still supported.)
Here’s a breakdown of each to help you decide which suits your business.
QuickBooks Online
Best for: Self-employed contractors and small to mid-sized construction companies looking for flexibility and easy access to financial data.
QuickBooks Online is a cloud-based solution that lets you manage your finances from anywhere with an internet connection. Plus, it starts at only $30 per month. This product offers:
- Accessibility: Access your financial data anytime, anywhere, from any device.
- Automatic updates: QuickBooks updates software and features automatically, avoiding the hassle of manual installations.
- Real-time collaboration: Collaborate with your team and accountant without lags and delays.
QuickBooks Enterprise
Best for: Large construction companies with complex accounting needs requiring advanced features and scalability.
QuickBooks Enterprise is an on-premises solution with robust features and industry-specific tools that make it ideal for managing high-level construction finance. Key features include:
- Advanced job costing: Track expenses at a granular level to understand project profitability.
- Custom reporting: QuickBooks lets you quickly create customized reports tailored to your construction business needs.
- Enhanced inventory management: Advanced inventory tracking helps you manage materials and supplies.
- Scalability: The platform supports a larger number of users and more extensive data requirements than QuickBooks Online.
- Integration with third-party tools: QuickBooks Enterprise seamlessly integrates with Fishbowl and other third-party applications and software, offering more capabilities than QuickBooks alone.
- Advanced security: The enhanced security features protect sensitive financial data.
QuickBooks Enterprise with cloud access
Best for: Larger construction companies that prefer an in-cloud option over on-premises hosting.
For those who need the power of QuickBooks Enterprise with the flexibility of the cloud, QuickBooks Enterprise with cloud access is an excellent option. It offers the same advanced features as QuickBooks Enterprise with the accessibility of hosting all information online. Key features include:
- Remote access: Similar to QuickBooks Online, you can access financial data securely from anywhere.
- Collaboration: Small and large teams can benefit from working collaboratively online, whether they’re across the city or across the country.
- Data protection: Cloud hosting provides automatic backups and enhanced security measures, offering peace of mind.
- Scalability: With up to 50 gigabytes of storage, you can scale operations as your business grows.
QuickBooks Enterprise Diamond
Best for: Large construction companies that need the most comprehensive solution.
If you’re looking for a robust option, try QuickBooks Enterprise Diamond. It offers all the features of QuickBooks Enterprise with some additional premium services — and the ability to share information with large teams. The platform includes:
- Payroll: Access advanced payroll features, including employee management and automated payroll, plus a dedicated team for help with setup and payment processing.
- Enhanced integrations: QuickBooks Enterprise Diamond provides discounted access to Salesforce, QuickBooks Time, and eCommerce integrations.
- Optional cloud access: There’s an option for remote access for companies that don’t want on-premises hosting.
QuickBooks Contractor Edition
Best for: Construction companies and contractors who need specialized tools and reporting capabilities.
QuickBooks Enterprise and Diamond’s Contractor Editions have additional tools just for contractors and construction companies. These industry-specific capabilities help you work faster, and you’ll feel confident that your bookkeeping system knows how to handle the tasks that come its way. Features include:
- Job costing: The system accurately tracks the cost of individual jobs and projects.
- Change order management: Manage change orders effectively and adjust project budgets as needed.
- Profitability reports: You can quickly generate reports that show the profitability of each job or project.
- Estimates and invoices: Create detailed job estimates and seamlessly convert them into invoices.
Pair QuickBooks with Fishbowl for the ultimate construction solution
There’s a reason why Fishbowl is the top management platform for QuickBooks users. This all-in-one inventory management solution works seamlessly with QuickBooks, providing crystal-clear financial visibility in perfect sync with your inventory and warehouse operations.
When you pair Fishbowl with the right version of QuickBooks, you minimize errors while maximizing productivity and profitability. If you’re ready to gain end-to-end visibility over your operations, schedule a demo of Fishbowl today.