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Optimize QuickBooks Customer Types for Contractors

How to Set Up and Use Customer Types in QuickBooks for Contractors

As a contractor, managing your customers efficiently is crucial for the success of your business. QuickBooks offers a powerful feature called “Customer Types” that can help you organize and categorize your clients, making it easier to track and analyze your business data. In this comprehensive guide, we’ll walk you through the process of setting up and using Customer Types in QuickBooks, specifically tailored for contractors and construction businesses.

What Are Customer Types in QuickBooks?

Customer Types are labels or categories that you can assign to your customers in QuickBooks. These types allow you to group similar customers together based on characteristics that are important to your business. For contractors, this could include categories such as residential, commercial, government, or specific project types.

Why Should Contractors Use Customer Types?

Using Customer Types in QuickBooks can benefit contractors in several ways:

  • Improved organization of customer data
  • Easier tracking of different types of projects
  • Better reporting and analysis of business performance
  • Streamlined marketing efforts
  • Enhanced decision-making based on customer segmentation

Setting Up Customer Types in QuickBooks

Follow these steps to set up Customer Types in QuickBooks:

1. Access the Customer Types List

To begin, open QuickBooks and follow these steps:

  1. Click on “Lists” in the top menu bar
  2. Select “Customer & Vendor Profile Lists”
  3. Choose “Customer Type List”

2. Add New Customer Types

Once you’re in the Customer Type List:

  1. Click on the “Customer Type” button at the bottom left of the window
  2. Select “New” from the drop-down menu
  3. Enter a name for your new Customer Type (e.g., “Residential,” “Commercial,” “Government”)
  4. Click “OK” to save the new Customer Type

3. Edit or Delete Customer Types

To modify existing Customer Types:

  1. Highlight the Customer Type you want to change
  2. Click the “Customer Type” button
  3. Choose “Edit Customer Type” to make changes or “Delete Customer Type” to remove it

Assigning Customer Types to Your Clients

Now that you’ve set up your Customer Types, it’s time to assign them to your clients. Here’s how:

1. For New Customers

  1. Click on “Customers” in the top menu bar
  2. Select “New Customer & Job”
  3. Fill in the customer’s information
  4. In the “Additional Info” tab, find the “Customer Type” drop-down menu
  5. Select the appropriate Customer Type for this client
  6. Click “OK” to save the new customer with their assigned type

2. For Existing Customers

  1. Go to the “Customer Center”
  2. Double-click on the customer you want to update
  3. Click on the “Additional Info” tab
  4. Find the “Customer Type” drop-down menu and select the appropriate type
  5. Click “OK” to save the changes

Using Customer Types in Your Contracting Business

Now that you’ve set up and assigned Customer Types, here are some ways to leverage this feature in your contracting business:

1. Customized Reporting

Generate reports based on Customer Types to gain insights into different segments of your business. For example:

  • Sales by Customer Type
  • Profitability by Customer Type
  • Accounts Receivable Aging by Customer Type

To create these reports:

  1. Go to “Reports” in the top menu
  2. Choose the report type you want (e.g., “Sales by Customer Detail”)
  3. Click “Customize Report”
  4. In the “Filters” tab, select “Customer Type” and choose the types you want to include

2. Targeted Marketing Campaigns

Use Customer Types to create targeted marketing campaigns for specific customer segments. For instance:

  • Send promotional emails to residential customers about home renovation services
  • Offer special discounts to commercial clients for large-scale projects
  • Create tailored newsletters for different customer types

3. Pricing Strategies

Develop pricing strategies based on Customer Types. For example:

  • Offer volume discounts for commercial clients
  • Create special pricing packages for government contracts
  • Implement seasonal promotions for residential customers

4. Customer Service Improvement

Use Customer Types to tailor your customer service approach:

  • Assign specialized team members to handle specific Customer Types
  • Create custom follow-up procedures for different types of clients
  • Develop type-specific satisfaction surveys to gather targeted feedback

5. Project Management

Streamline your project management process by utilizing Customer Types:

  • Assign different project managers based on Customer Types
  • Create type-specific project templates and checklists
  • Set up custom job costing methods for different Customer Types

Best Practices for Using Customer Types in QuickBooks

To make the most of Customer Types in your contracting business, consider these best practices:

1. Keep It Simple

Don’t create too many Customer Types. Stick to a manageable number that truly reflects your business needs. For most contractors, 5-10 types should be sufficient.

2. Be Consistent

Ensure that all team members understand and use Customer Types consistently when entering new customers or updating existing ones.

3. Review and Update Regularly

Periodically review your Customer Types to ensure they still align with your business goals. Add, modify, or remove types as needed.

4. Use Subcategories

For more detailed organization, consider using subcategories within your main Customer Types. For example, under “Commercial,” you might have subcategories like “Retail,” “Office,” and “Industrial.”

5. Integrate with Other QuickBooks Features

Combine Customer Types with other QuickBooks features like Classes, Items, and Custom Fields for even more detailed tracking and reporting.

Conclusion

Setting up and using Customer Types in QuickBooks can significantly improve your contracting business’s organization, efficiency, and decision-making processes. By categorizing your clients and leveraging this feature for reporting, marketing, and project management, you’ll gain valuable insights into your business performance and be better equipped to serve your customers.

Take the time to implement Customer Types in your QuickBooks setup, and you’ll soon see the benefits of this



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