How to Handle Multiple Projects and Job Costing in QuickBooks: A Guide for Small Business Owners and Contractors

As a small business owner or contractor in the construction industry, juggling multiple projects while keeping track of costs can be a real challenge. Fortunately, QuickBooks offers powerful tools to help you manage your projects and job costing effectively. In this article, we’ll explore how to use QuickBooks to handle multiple projects and job costing, ensuring you stay organized and profitable.

Why Job Costing Matters

Before diving into the how-to, let’s briefly touch on why job costing is crucial for your business:

• Accurate pricing for future projects
• Identifying profitable and unprofitable jobs
• Better budget management
• Improved decision-making for resource allocation

Setting Up QuickBooks for Multiple Projects

To get started with managing multiple projects in QuickBooks, follow these steps:

1. Enable Job Costing Feature

First, make sure the job costing feature is turned on in QuickBooks:

1. Go to “Edit” > “Preferences”
2. Click on “Jobs & Estimates”
3. Select the “Company Preferences” tab
4. Check the box for “Do You Create Estimates?”
5. Click “OK” to save changes

2. Create Customers and Jobs

For each project, you’ll need to set up a customer and a job:

1. Go to “Customers” > “Customer Center”
2. Click “New Customer & Job” > “New Customer”
3. Fill in the customer details
4. Click “OK” to save
5. Right-click on the customer name and select “Add Job”
6. Enter job details and click “OK”

3. Set Up Items for Services and Materials

Create items for the services and materials you’ll use on your projects:

1. Go to “Lists” > “Item List”
2. Click “Item” > “New”
3. Choose the item type (e.g., Service, Inventory Part)
4. Fill in the item details, including description and rate
5. Click “OK” to save

Creating Estimates for Projects

With your setup complete, you can now create estimates for your projects:

1. Go to “Customers” > “Create Estimates”
2. Select the customer and job
3. Add items, quantities, and rates
4. Include any additional notes or terms
5. Save and send the estimate to your client

Tracking Costs for Each Project

To accurately track costs for each project, follow these steps:

1. Record Time Spent on Projects

Use QuickBooks’ time tracking feature to log hours worked on each project:

1. Go to “Employees” > “Enter Time”
2. Choose either “Time/Enter Single Activity” or “Weekly Timesheet”
3. Select the employee, customer, and job
4. Enter the time worked and any notes
5. Save the time entry

2. Enter Bills and Expenses

When you receive bills or incur expenses related to a project:

1. Go to “Vendors” > “Enter Bills”
2. Select the vendor and enter bill details
3. In the “Items” tab, select the appropriate items and assign them to the correct customer and job
4. Save the bill

3. Record Material Usage

To track materials used on each project:

1. Go to “Vendors” > “Inventory Activities” > “Adjust Quantity/Value on Hand”
2. Select the inventory item and adjust the quantity
3. In the “Customer:Job” column, assign the materials to the appropriate project
4. Save the adjustment

Monitoring Project Profitability

QuickBooks offers several reports to help you monitor the profitability of your projects:

1. Job Profitability Summary and Detail Reports

These reports show you the overall profitability of each job:

1. Go to “Reports” > “Jobs, Time & Mileage” > “Job Profitability Summary” or “Job Profitability Detail”
2. Customize the date range and other options as needed
3. Review the report to see income, costs, and profit for each job

2. Estimates vs. Actuals Report

This report compares your estimated costs to actual costs:

1. Go to “Reports” > “Jobs, Time & Mileage” > “Job Estimates vs. Actuals Summary” or “Job Estimates vs. Actuals Detail”
2. Customize the report as needed
3. Review to see how your actual costs compare to your estimates

3. Unbilled Costs by Job Report

This report helps you identify costs that haven’t been billed to the customer yet:

1. Go to “Reports” > “Jobs, Time & Mileage” > “Unbilled Costs by Job”
2. Customize the report as needed
3. Review to ensure all costs are being billed to the customer

Tips for Successful Project and Job Costing Management

To make the most of QuickBooks for managing multiple projects and job costing, keep these tips in mind:

• Be consistent in your data entry and categorization
• Regularly review and reconcile your project costs
• Use class tracking for additional reporting flexibility
• Consider using QuickBooks’ progress invoicing feature for long-term projects
• Train your team on proper data entry procedures
• Regularly back up your QuickBooks data

Conclusion

Managing multiple projects and job costing in QuickBooks can significantly improve your business’s efficiency and profitability. By following the steps outlined in this guide, you’ll be well on your way to better project management and more accurate cost tracking. Remember, the key to success is consistency and regular review of your data. With practice, you’ll find that QuickBooks becomes an invaluable tool for your construction business, helping you make informed decisions and grow your bottom line.