QuickBooks Setup for Success

It’s the start of a new year and for many, this is the time to make changes to your QuickBooks before your season gets busy.

There are 4 major areas I consider when working with contractor clients:

  1. Software – So much depends on your setup and what setup you can do depends on your software! So, is your version of QuickBooks a good fit for your company?  Regardless of how long you’ve been in QuickBooks, this is always good to review.  This will give you a start:
    1. Start with creating 2 lists – what you need and what you want. Realize that you may not get everything you want, so you might have to rank some features. Also, keep in mind that QuickBooks is an accounting package so it won’t be the best for CRM, scheduling and time tracking.  Here are several questions to help guide you:
    2. How many need access? This may quickly narrow your options
    3. Who needs to be able to do what? For instance, if you just want someone to track their time, you might want a mobile time tracking product that integrates with QuickBooks instead of giving them access to QuickBooks.
    4. Do you need to job cost? The desktop version of QuickBooks (QBDT) still beats the online version Online (QBO) (by far in my personal opinion) when it comes to job costing but QBO is making progress.
      1. The desktop can track labor costs per task (if you run payroll through QuickBooks) and has many job cost reports
      2. You can now track labor costs per job (project) if you use one of the QBO payroll products and Intuit’s TSheets; TSheets can use the Projects. However, the project field is not currently available to add-on products so if you use something different for time-tracking, you miss out.  There currently only a couple job cost reports.
    5. Are you currently using a 3rd party product or considering one? If so, which versions of QuickBooks do they integrate with?  Some will integrate with both but not with all the same features.  And some will integrate with desktop only or online only, so you need to know!
    6. If you want mobile access, what you do you want to be able to do when you’re not in the office? Sometimes an add-on product might be a better option.
    7. For those of you in Pro Plus, or Premier Plus or Enterprise, let me know so we can price your current plan and see if there’s a plan that can save you money and/or give you more for your money. When you call Intuit directly, you won’t always get someone who has your best interests at heart – they have sales quotas & goals ;-)
    8. A few resources that might help you more:
      1. My feature comparison chart – this makes it easier to compare
      2. An article I wrote comparing QuickBooks Desktop (Pro/Premier/Enterprise) with QuickBooks Online. In spite of the rumors, Intuit is not giving up on the desktop versions of QuickBooks – they are still the bigger money makers for them.  I am in the process of updating this article
      3. Videos showing the differences between the products
      4. Intuit made several changes at the end of 2019 so might be good to talk if you are considering changes. Number of users, what you do for payroll, what you need for job costing, what you do for time tracking, inventory needs, and any add-on products all come into play.
    9. And if you want to make a change, let us know. There are promotions we can’t always advertise, and there are often life-long discounts we can get for you (and not available from Intuit) versus a short-term discount followed by full price later.
  1. Setup – I often see problems in the setup, which can explain why you can’t get the reporting or information you want. So here are some major areas to consider:
    1. Classes – Classes are unique to QuickBooks. I think of Classes as way to do side-by-side comparisons of Profit Centers. You can see a sample report below.  For contractors, that’s usually your divisions.   Here are some examples to get the wheels turning.
      1. Landscapers, often use maintenance, Installs, Irrigation, Lighting, and Snow (or some variation).
      2. Painters might do interior and exterior work and/or commercial vs residential (I can create a P & L for Customer Type if you don’t want to use classes).
      3. Construction might want New construction, remodel – maybe even historic, if that’s a specialty of yours.
      4. For those of you with multiple offices, then you might want to use location – especially if those locations are in different sates
      5. Other ideas: Sales rep, partner, crew, program….
      6. You can even have sub-classes; starting with 2020, you can now collapse the subs and just look at the parent classes when you want!
        QuickBooks Setup
    2. Chart of Accounts – Those not using Classes are usually doing it in their Chart of Accounts. I used to start here but I found that once we setup Classes, we were going back & changing the Chart of Accounts, so now Chart of Accounts is 2nd ;-). My main strong recommendation for all you contractors:
        1. Your job costs belong in the Cost of Goods section. The sample service file in QuickBooks is a great idea of what NOT to do!! My rule of thumb – if you had to spend that money for that job (e.g. buy materials, pay for labor, rent equipment, etc.) then that’s a direct cost.  Some of you have all your payroll in payroll expenses – you’ll want to separate office staff from field staff since that’s such a large component of your job costs. You’ll like the separation when looking at your Profit & Loss reports as is the example above.  Also note in the above example, they did NOT pull out field labor as I recommend (tsk tsk!).  Knowing your Gross Profit after job costs will help you know what you need to cover overhead plus have a profit!  It also makes estimating easier because then you’ll know what % profit margin you need to attain from the job in order to cover your overhead and still yield a nice profit.
    3. Items – The key to job costing in QuickBooks is in your Items – NOT your Chart of Accounts!
        1. Decide what Items you need. My rule of thumb for Items (Products & Services) is (1) What do your customers need to see and (2) What do you want to see in your job cost reports
        2. For contractors, if you do T & M invoicing (Time & Materials), you want your Items to have a cost side as well as an income side. That way you can see what you paid for the different materials and subs as well as what you invoiced.
    4. Jobs – Many of you provide more than one service for your customer and there is often crossover in time period. So if you want to see the job costs for one job, you need to be able to specify the job. In some cases, I just see a list of customers, so it’s hard to pull out the costs for a specific job.   If these are one-time customers, 1 short job or 1 service, then you may not need jobs, but most contractors I work with need to specify jobs.
    5. Payroll Intuit recently made several changes to their payroll products (I just learned about them the latter part of December) so there are now more options for payroll. If you want job costed payroll, still the best are Enhanced or Assisted Payroll with Intuit and I can get your pricing discounted as well as help explain how they work and which might be your best option.  Depending on number of users, number of employees, and type of payroll, sometimes payroll bundled in with one of the QuickBooks products is a better deal.  it might be easier to discuss.  However, if you are using QuickBooks Online, there are several new payroll products (and we can get you discounts) let us know so we can help you make the choice best for you.
        1. If you want to outsource your payroll, there are a couple different “tricks” to get the labor costs – let me know if you need to know.
  2. Work Flow – This is another big area where I hear complaints and work to help my clients streamline. You usually know where the work slows to a crawl – could be time tracking, payroll, invoicing, payables, tracking cash flow or getting job cost data or some other type of reporting.  Poor workflow adds to your overhead and stress, so while it’s not a hard cost like field staff, it definitely affects your bottom line. It’s good to list the areas that are a problem – then you can begin to look at solutions.
  3. Reports – This is often the issue that prompts changes. What reports are you unable to get, and/or doing them in Excel? Which reports take too long to get? What information would you like to see in reports but are not?  From there, we can begin to address the issue.

If you would like to make a change in your QuickBooks, payroll or want help with setup, workflow, or reports, please contact our office. Now’s the time to do it before you get really busy!

Here’s to a year that will provide better data and smoother and faster workflow!

Posted in Business Finance, Features, Job Costing, QuickBooks | Tagged , , , , , , , , , , , , , , | Leave a comment

QuickBooks Year-End Checklist

There’s lots that needs to be done at the end of the year to get your books ready for taxes. Here’s a list of to help you; those who have been diligent about bookkeeping will find this list will be shorter.

  • Order Forms: If you haven’t done so already, get the forms you need like your W-2s, W-3s, 1099s, and 1096s.  Even if you e-file with Uncle Sam, you still have employees and vendors needing documents.
  • RECONCILE !! I can’t tell you how big this step is.  This is a good step to verify that you have tracked all money into and out of the company and will help you find missed entries, duplicates, checks not cashed, and more.  You will save money with your accountant if they don’t have to reconcile.   And DO NOT simply rely on Bank Feeds or go into the register and check off transactions. I promise that using the reconcile feature inside a QuickBooks will not only be faster but more accurate. Accounts to reconcile would include
      • Bank and credit card(s)
      • Loan accounts- Remember, interest is an expense – it doesn’t reduce your loan balance, so do review; your bank may have that online as well as sending out a statement.
      • Other balance sheet accounts, such as employee advances, prepaid insurance, customer prepayments, etc.
  • List of loans and terms – Make a list any new loans, lines of credits, etc. that you took out this year. Your accountant may want to see a copy of the terms and interest rate.
  • List of equipment purchased – Your accountant will want to know of any equipment, vehicles, furniture etc. that you purchased during the year. If the purchase is large enough, rather than expense the purchase in full, your accountant will depreciate the purchase over a few years. Ask your accountant what size purchase – frequently it’s been purchases of 500 or 1000, but with tax law changes their answer may be different.  Usually your accountant will want a copy of the receipt or purchase document with the price.  In the case of a vehicle where you had a trade-in value and/or down payment, then they would want that information as well.
      • FYI – for future reference there is a Fixed Asset list where you can keep lots of pertinent information. Click on List> Fixed Asset List. In the future, when you purchase a fixed asset, you can use an Item (instead of account) and select Fixed Asset so you can put in the detail.
  • Employees
      • Unemployment – unemployment rates frequently change each year in part based on how many employees in any claim with your company. The state of Maryland usually sends you a letter in November with the number to call to see what your new rate will be. If you process payroll yourself in QuickBooks, look to see if your version will let you enter the new rates for the upcoming year – new versions do. If you need help entering the new rates, call us for help.
      • Employee withholding – it’s good to check whether employees’ withholding will be the same or if they want to revise it, so have them do a new Federal W-4 and state withholding forms (sometimes they decide after their taxes are done!)
      • Before you print out your w-2’s,
        • Run the Payroll Summary Report and compare to the W-2’s
          • Besides wage and taxes, you may also need to review fringe benefits that need to be on a W-2
        • 1099 Vendors –Review your list of vendors. To get your list, Click on Vendors, Print 1099’s
          • Be sure that all who need to get a 1099 are marked as 1099 eligible. When in doubt either call them, ask your accountant or make them 1099-eligible. Best to err on the safe side!
          • Confirm that contact information is correct, ask for tax ID or have them send a W-9.
            • Some companies make it a policy to obtain a W-9 before they ever pay a vendor – that’s incentive to get the form returned to you!!
            • Here’s the link to the IRS website to get the W-9 – they’re listed right at the top (left side)
          • If you need to update several, the Add/Edit Multiple Lists is a great tool for updating this information. Simply click on Customize Columns and select the Tax ID field (and any others you might want); remove those you don’t need at this time.  This does NOT remove any data from your QuickBooks; this is simply a feature to simplify editing.

QuickBooks Year-end Checklist

  • Inventory – If you have inventory do a physical inventory (Inventory > Physical Inventory Worksheet) and then compare with what QuickBooks says.
      • I also recommend you do NOT print out the Quantity On Hand column so no one can get lazy and use the numbers in the system
      • For those with large inventories, you may want to consider “cycle” counting – i.e. you systematically do counts on just some of your inventory checks (daily, weekly, monthly – whatever works), but this way it doesn’t get away from you. FYI: Cycle count is a feature in the Advanced Inventory features found in Platinum Enterprise.

QuickBooks Year-end Checklist

  • QuickBooks Version – Intuit supports 3 years, so in May they will “sunset” QuickBooks 2017. Doesn’t mean 2017 won’t work, but if you download bank transactions, use payroll or email reports, invoices, or statements, those features will no longer work.
      • Here’s a link to my article discussing the new 2020 QuickBooks products.
      • This page has 2 videos highlighting the differences between the different versions,
      • This page has a comparison chart of the different QuickBooks versions; we can also provide demos if you need
      • You can also download a 30-day trial of Enterprise here.
      • I’ve mentioned before but I’ll mention it again ;),
        • For those of you using Enhanced Payroll and paying for direct deposit fees, Enterprise Gold is often a better deal – even if you’re in QuickBooks Pro or Premier.
        • Intuit just added another level in QuickBooks Enterprise that includes Assisted Payroll and TSheets. Contact our office for details and best pricing.
      • For those of you considering moving to the online version but want job costing, Intuit is making progress but check out this article so you know what you can AND can NOT do.
      • If you would like to upgrade, let us know – we can help you get a good price and assist with the upgrade if you need.
    • Review your QuickBooks setup. This is a great time to make changes in your QuickBooks setup.  Even I do this!  Perhaps you want to use Classes or change your Classes.  Or maybe the Chart of Accounts needs some cleaning up.  And often the Items list can use some (or lots!!) of clean-up (including mine!).   We’ll be happy to help you review, make recommendations, and even give you tips to make it go faster!
    • Other Services – Calendar or fiscal year-end can be a good time to review other services – whether you need them and or want to change them.
    • Customer payments and credit cards – If you would like to process checks in QuickBooks instead of having to go to the bank, want customers to pay you online or have customers asking you to accept credit cards, Intuit Payments is definitely worth reviewing – they have simplified and lowered their rates.  With no double-entry, the ease of reconciliation and the time saved, it’s often a smart decision. There is NO contract, so it’s always worth giving it a try. Contact our office so a member of our team can discuss your options option and help you sign up. Guaranteed lowest QuickBooks Payments rates through Muir & Associates!

Payroll – This is a great time of year to review your payroll options – especially since just recently Intuit has made several changes in their payroll products (including the names).  Contact our office so we can either help explain the different options or connect you to our Intuit Payroll Specialist, Joey. Keep in mind we can get you discounted pricing that you can’t get from Intuit.   Don’t just look at tangible costs. Also consider job/project costing (if that’s an issue), amount of time to handle payroll tasks, risk (of under payments or missed payments) or fraud (I’ve known of bookkeepers and even a payroll company who embezzled).   For those who don’t want the hassle of the payroll tax filings and w-2’s, there are Intuit products that will do that for you.

Adjustments to make to your books. While some adjustments are best left for your accountant, there are a few that you can do or at least get the information pulled together for your account.

    • Bonuses – It’s great to give bonuses to employees at year-end, but it’s not so great to forget about the tax part of it. Bonus checks should always be run through payroll, but often are not, which requires an adjustment after the fact.
    • Work in Process– For those of you who have projects that span over a few months and need to track work in process there are usually two methods – one simply for year-end for tax purposes and the other method is done monthly; typically only my larger commercial clients track monthly. If you use QuickBooks Enterprise, the WIP Summary Report is helpful for those who track percent completion. Contact our office if you want help with that.
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Year End Review and Planning

By now you probably have a good idea of your year-end numbers.  As you look back over your year, take the time to list what worked – and what didn’t. Here are a few recommendations to help you review 2019 so you can plan for 2020.

  1. Profitability: Where were you most profitable? Where were you least profitable?  I would look at
    • Service line or division or department – You should easily be able to compare your different divisions. Total sales is not your only indicator! You want to compare AFTER your job expenses including field labor (cost of goods). If you use the Class tracking in QuickBooks, which I highly recommend, comparing divisions will be easy!
    • Type of customer – If you review your customer list and start looking for patterns as to the type, you may find you really like some and would love to drop others and your numbers support your decision. Some ideas for type could include residential, commercial, builder, HOA’s, property management, government, age or other demographics.  QuickBooks can help you track this easily. Identifying the type of customer(s) you like (besides those who pay quickly ;-) will also simplify your marketing.
    • Location – Are you finding a certain municipality or county or subdivision or… hasn’t been profitable? Or maybe it’s been a gold mine for you. Perhaps it’s time to consider moving to a new location so you’re more centrally located or it’s been so profitable it’s time to consider a second location.
    • Jobs – How profitable were your jobs? Were you happy with how you accounted for overhead (in addition to job costs) when estimating? What patterns do you see? Over time, you’ll find that there are certain types of jobs you enjoy, are more profitable, easier to estimate.  Maybe you decide certain types of jobs you will no longer do because you lose money on them or you just really don’t want that type of work or that they’re too small – or too large.  I know many are often afraid of turning away projects, but if you underestimate your costs or the crews are inefficient, you aren’t helping your business.  When you narrow the type of work you do, you’ll find it will be easier to estimate and your crews will be more efficient.  It will also be easier to market to the types of clients and jobs you prefer!
  2. Staffing: Were there changes in staffing? Consider both out in the field and in the office. Sometimes a new employee could be a reason to add or drop something. For example, a new employee with certain skills may suggest you’d like to use more of those skills, which could mean different jobs or different clientele.
  3. Overhead: Have you reviewed your overhead costs lately?  If not, maybe it’s time!
    1. I find it’s easy to forget about payments that are automatically paid by credit card or deducted from your bank account. I know I made changes in a couple subscription plans that saved money in my own business.
    2. Some areas I sometimes see clients paying more than needed in areas I can help would include:
      1. Software
      2. Payroll
      3. Credit card processing
      4. Checks

I’m often able to get discounts or get clients upgraded to newer accounts that can save money so it’s always worth checking with your office.  Doesn’t cost you anything and if we can find a better deal, you save 😊.

  1. Time: Many of you are conscious of time out in the field, but what about office time? I find few companies clock how long it takes to do office tasks and often there are inefficiencies.
    • Are you still doing paper time sheets or using the old punch time cards for employees to clock in/out? I know from personal experience just how consuming that can be. Maybe it’s time to go mobile – there are lots of good products out on the market – of course some better than others!
    • Are you entering data in one place and then some version of that same data in a second place (like a spreadsheet and then in QuickBooks – or vice versa)? Could there be a way to integrate the data so you don’t have double-entry resulting in saving time?
    • Are you doing work-arounds? Maybe it’s time to re-assess – can it be done in QuickBooks or will an add-in product solve your problem?
    • Are you running reports in Excel? If so, is that because you can’t get that information from QuickBooks? I frequently find that setup and lack of training are key reasons you’re not getting some of the reports you want/need from your software and hence using Excel to generate the report. I’m happy to help you take a look.
    • Are reports taking a long time to run? Perhaps there’s some file maintenance that needs to be done or upgrade in computers or networks. Slow computers add to your labor costs as people sit and wait – including you!
    • Are there faster ways to get your work done? Unless you live and breathe QuickBooks like I do, you might find there are features and/or “tricks” to get the information you want that you don’t know about.
    • Sometimes it pays to talk to a professional and I’m happy to take a look and discuss your situation.
  2. Software: Is your current software solution still a good fit for you?
    • QuickBooks Whenever I’m working with clients I start with discussing what version of QuickBooks you’re using and your pain points. Sometimes QuickBooks can do what you want – you just didn’t know it could or how to get the results you wanted.  If your current version won’t do all you want, we discuss pros/cons of keeping what you have, upgrading and/or getting an add-on product.  I recommend having a needs list and a wish list.  Most times, you won’t find something that fits all of your needs and wishes so you have to decide what’s most important – and that’s unique to your business.
    • Add-ons –Is it time to add a 3rd party product to solve for one or more of your pain points? Add-ons come in 2 “flavors”
      • Task– specific – These often solve 1 issue – e.g time tracking, payroll, estimating, CRM, etc.
      • Industry-specific – These products typically solve for more than one pain point within your industry and will use your lingo because they “understand” you. You’ll find that add-ons have differences so there’s no “one-size fits all” solution – you will still have to decide which one best fits your business.
      • Integration: Of course, I always want to know how the products integrate with QuickBooks; that’s one reason why I like the Intuit add-ons because I know the integration will be good.  If job costing is important, there are better ways than others for those job costs to come in to your QuickBooks if you want to maximize the reporting in QuickBooks.

If you need help either getting this data or wondering how to adjust your setup and/or procedures, let me know – I’ll be happy to work with you

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Allocating Overhead by Job

There is more to running a business than just the costs on the job (I’m sure you’ve realized that by now!) Examples would be cell phones, uniforms, office expenses, salaries for non-field staff, marketing, equipment maintenance, wear and tear on vehicles and equipment (one day they will need to be replaced), insurance and more – all a part of the overhead to run your business. Your jobs have to generate enough revenue to not only cover the job, but your overhead AND still result in a profit. So, you need to keep those “extra” costs in mind when estimating jobs. Last time, we discussed allocating at the division level (which might get done monthly or quarterly). Today we’re focusing on the job level.

There are different methods for determining what percentages to use to cover overhead costs, so best to speak with your accountant or landscape consultant for their recommendations. If you use LMN (Landscape Management Network) software, they let you choose from one of three methods, and based on your decision, LMN shows you both percent and actual dollars, so you’ll have what you need to allocate in QuickBooks for any given job!  (You can find out more about LMN and overhead recovery here)

You can allocate overhead costs one of two ways:

  1. On an account level (you would view in a P & L for the job)
  2. At the Item level (which provides more detail) – you would view these in your Estimated vs Actual Details and Job Profit Profitability Detail reports

Profit and Loss for Job
Similar to Allocating by Division, you can use a journal entry to allocate the costs

  1. Create a Cost of Goods Account called Allocated Overhead
    1. Create a journal entry
      1. For a journal entry,
        1. Debit your Cost of Goods Accounts
        2. Credit your expense accounts
          1. The fastest way is to have just one expense account called Overhead Allocated
          2. The next fastest is if you have subtotals for specific accounts (e.g. Indirect Costs)
          3. Or, you can do at each individual account level.

allocating overhead

allocating overhead

Allocating for Job Profitability Detail and/or Estimated vs Actual

These two reports pull from the Items List NOT the Chart of Accounts.  Journal entries are out because you can’t use Items in journal entries.  Since you don’t want to double-expense your job costs, then you might like to use the Zero Dollar check trick.

  1. Create a bank account for job costing or allocating overhead (you don’t want these transactions mixed in with your “real” bank accounts. The balance on this job cost bank account is ALWAYS $0)
  2. Create Items for the type(s) of overhead you want to allocate – you can have as few as 1 (e.g. overhead) or you can break it out into categories if you prefer. g. overhead for equipment, labor, subs or….
    1. If you are using LMN, LMN will calculate your overhead recovery so you’ll have the actual numbers to use.
  3. The item can be an “other charge” or service item. Which type will depend on where you want to see these costs when reviewing your job cost reports; QuickBooks sorts first by Type of Item.
    1. Items need an account – I would suggest a Cost of Goods account so if you decide to run a P & L for the job, this can show up with your job costs, but up to you if you prefer to use expense.
  4. Write a check (the check total will be 0)
    1. Using the Items tab, enter the item(s) and costs you want to allocate
    2. Then using the expense tab,
      1. Select the appropriate account(s) (these are the ones your item(s) posted to)
    3. Negate the amount on the items so the net check is $0

allocating overhead

Figure 1: Journal entry for above check

allocating overhead

Here’s how the zero-dollar check affects your job cost reports.

allocating overhead

allocating overhead

allocating overhead

allocating overhead

Figure 2 Note that you aren’t double-expensing your overhead

Allocating overhead will help you see how well (or not) you are estimating so you can make any necessary adjustments going forward.

You can have the journal entries and checks memorized if you want. My recommendation would be either make the dollar amount $0 or $1 so you know you have to put in the actual numbers.  Otherwise you might forget and assume the memorized numbers are the ones you want!  Contact our office if you have questions, and if haven’t already, check out the LMN article and video to learn more about different methods for including overhead recovery in your estimate.

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Allocating Overheard Part 1

For contractors, understanding all the costs that involved with a job is important. There are the obvious ones such as labor and materials.  However, you not only need to cover direct job costs but also the overhead for the business, and still net a profit (or why else be in business?!)  A few areas to consider could include:

  1. Office staff/expenses,
  2. Equipment/vehicle costs (direct and indirect like wear & tear)
  3. Indirect costs like fuel
  4. Shop staff, repairs & maintenance

There are a variety of ways you can allocate overhead. Today we’ll look at the simplest and fastest method – allocating by division. I’ve broken this up into 2 parts:

  1. Allocating ALL your overhead expenses
  2. Allocating your Indirect Costs

Allocating all overhead expenses: Assuming your QuickBooks Classes are your company’s divisions, you can allocate overhead by division (or Class) Below is a P & L by Class – I collapsed the accounts so you just see the totals and I turned on % of row so you can see the percentage for each division in terms of sales, direct costs and gross profit.  You can either use total sales or gross profit percentages as the way to spread across.  For example, if you use percent of sales, then you would multiply the overhead by 66.8% for New Construction in the example below.

    1. Create an expense account called allocated overhead
    2. Create a journal entry crediting overhead by the total expense shown in the overhead account and debiting your divisions by the appropriate percentage

Here’s the resulting P & L

  1. Another option is to allocate just indirect costs (e.g. fuel, equipment costs, supervision, etc.)
    1. Create a Cost of Goods Account called Allocated Indirect Job Costs
      1. You’ll have to add up your indirect costs. If you’re already one who has that sectioned off, then it’s easy to grab the numbers. Otherwise decide which accounts to total.
      2. I added some indirect costs to the example below (note -this would not be a complete list).

Here’s the journal entry

And the resulting Profit & Loss

So, if you’re looking to tip your toe in the water on allocating, this is definitely the easiest.  And if you do nothing else, it definitely makes you take a closer look at your numbers and what each division needs to do to be profitable AFTER not only your job costs but your overhead as well.   However, as you’ll see in part 2, there are ways to allocate overhead recovery by job, which would be more helpful for estimating successfully. So, stay tuned!

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Determining Your Most Profitable Sales

It’s time to review your sales to see where you were most profitable in 2019 and see what changes, if any, you’ll make for 2020.  When looking at profitability, there are a few different factors you can review using QuickBooks.  So here are 5 areas to consider.

  1. Identify Your Most Profitable Division/Service Line: If your divisions or service lines or departments are classes, this can be simple to evaluate. Run your P & L by Class, then customize the report.  % of Income lets you compare profit margins and % of Row lets you see which division is bringing in the most revenue.  Then not only will you have a comparison by dollar amount, but the percent of your business income AND expenses. If you take the time to allocate your overhead (either on a monthly or quarterly basis), you can get an even better picture.
  1. Identify your Most Profitable Products/Services – If your Items are double-sided, AND you use the items tab when you receive your bills, then the Item Profitability Report can be helpful as well. Choose Year to date or Year to last month for your date range. Is it time to drop a service or product?  Or maybe you want to sell more of a particular product or service line.

Note: If you haven’t been good using Items in your job costing this is an area that may not reflect true profitability. If so, put it on your list to improve for 2020 ;-)

  1. Identify Your Most Profitable Customers: Look at the Job Profitability Summary It will run on an accrual basis only, so you could have some unpaid invoices in there.  But hopefully your customers will be forthcoming with payment.  The default date range is all, since some jobs cross over years, and in some cases, multiple years.  If that’s true for you, then you may want to keep that setting. But for most of you, the jobs tend to be shorter, so I would recommend running it just for this year.  For the purposes of identifying the top customers, you can collapse the report so you just have the customer names. Export the report to Excel and then you can sort for the Difference column which should be your profit.  Of course, this assumes you’ve been good about costing all your labor and materials to the job ;-). For those of you who outsource your payroll, you may find that not all your labor costs are in.
  2. Identify Your Most Profitable Types of Customers: When you look at the top customers above, do you see a pattern as to the type of customer? Perhaps they’re commercial or government or residential or landlords, or …. You get the picture. (I use industry for type).   You can also use subtypes.  If you want more top customers, it’s helpful to have a better picture of just who they are.

If you use the Customer Type field, you can create a Custom Summary report with Customer Type for column headings. (Click on Reports>Custom Reports>Summary).   You can also turn on % of Row if you’d like.

  1. Identify Your Most Profitable Jobs: Click on Reports>Jobs, Time & Mileage> Job Profitability Summary. You can export this out to Excel as is or filter on the customers you identified above.  Unless all your jobs have unique names/numbers this will take more work before you can easily sort in Excel. Perhaps the quickest way is to copy the customer name down so it is with the job name and then sort by Difference (your profit). You can use the Auto Filter feature in Excel to remove the rows with blanks in the job column.

Also look to see if there is a pattern in the type of job you do for that customer.  Some types of jobs are more profitable than others. Makes more sense to stick to the more profitable jobs!

As you go through these steps, you might also want to take note of which ones are the bottom of the list. Perhaps it’s time to drop those customers, jobs, products or services.

When you can identify your true top customers and jobs, then you have a better idea of how to market, and you can focus on more profitable customers and jobs, which will boost your bottom line rather than trying to be everything to everyone.

If you need help getting this setup in QuickBooks, contact our office.

Would love to hear if you had any “a-ha’s” as you look at these reports!

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Muir & Associates Announces Partnership with LMN

Muir & Associates Announces Partnership with LMN – the Top Landscape Business Building Software.

As an Elite QuickBooks Solution Provider, I’m excited about the collaboration of QuickBooks and LMN! Both of these products help landscapers monitor and grow their business. When used together, the integration of the two saves landscapers valuable time and money.  Syncing estimates, timesheets and invoices also eliminate double-entry and costly mistakes.

QuickBooks Enterprise allows for more users, more reporting functionality, more customization, reduced payroll costs, priority support and much more!  LMN Pro offers unlimited invoices, invoices, file and photo storage in addition to the budgeting, CRM, scheduling and timesheets found in their lower products.

We also have an exclusive deal for those new to QuickBooks Enterprise and LMN.  Those new to Enterprise can save up to 40% off their first 12-month subscription and those new to LMN can receive 33% off a 12-month subscription of LMN’s premier Pro subscription!  Definitely an amazing deal This is a limited time offer, so take advantage of the savings and harness the power of QuickBooks Enterprise and LMN Pro!

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Four Areas Where Spending More Pays Off

It’s generally a good idea to keep overhead costs low so that your business profits will be higher.  This is especially true with items that are fairly standardized, such as utilities and rent.  But there are times when increasing expenses pays yields nice dividends like investments. Here are four areas to consider so you can reap the rewards.


Whether it’s for you or your staff, good training can pay back for years to come. Having untrained staff, whether office or field, impacts

  • Getting work done on time (slow can be costly)
  • Getting it done well or correctly, (incorrectly can be expensive) and
  • Your reputation. You definitely don’t want that to suffer!!

While QuickBooks is user-friendly, I’ve lost count of the mistakes I made in the past as well as those I see my clients make.  When I do my assessments, I cover a wide range of areas and it gives me a good idea of just how much (or how little), those using QuickBooks know.  Then,we can tailor training that addresses both the “how-to” as well as ways to get work done more efficiently.

You might get training to increase your skill in your profession.  I know many of you need to maintain certifications; that provides both opportunities and impetus for training.  Not only do you learn new “tricks” or tools of the trade, but it provides another benefit when marketing your business – especially if you are compared to those without your credentials.

Sometimes that training includes helping to run your business, such as general business skills, new technology, marketing, finance, and leadership.  And just about everyone can benefit from learning more about project management, communications, and negotiations, to name a few more.


For many of you, that’s the tools and equipment while out in the field as well as the tools in the office. Old or cheap equipment often affects how quickly work gets done as well as your maintenance costs. The last thing you want is to have to postpone work because you don’t have working equipment!  I know some companies lease lots of their equipment so they can easily get replacements when something stops working and they can easily upgrade to a newer/better model.

In the office (and for some field staff), it’s a great idea to provide your employees with the most powerful computers and software on the market.  The cost of labor outweighs the costs of the computers, so it makes sense to load employees up with the best tools you can.  An employee with a slow computer, through no fault of their own, is not giving you their best, and that will cost money in lost productivity.  One of the reasons they went to larger monitors and dual or triple monitors was they found the cost of an employee having to scroll or wait for something to load affected productivity.  While it may seem small, multiplied over the day/week/year and then number of employees, it definitely adds up.  Even 5 minutes a day over 50 weeks is over 20 hours – then multiplied by the number of employees – it adds up!

Personally, because I know I’m going to load new software every year that won’t care about the age of my computer, I get plenty of RAM and go with a faster computer (not the top, but definitely above the middle).  If you’re the owner, you can spend your time fighting with a machine or getting a ton of work done.  I’m pretty sure the latter is more profitable.


With software, there are two areas to consider: your existing software and software that solves for a pain point.

In the case of existing software, I often see businesses fighting upgrading software, such as their QuickBooks. I always recommend looking at what the new version offers.  If there are features that help you get your work done faster or being able to do something you’ve wanted for years, it usually makes sense to upgrade so you and your staff can get work done more easily.

In the case of software that solves for a pain point, you have to ask what’s the cost of doing it the “long, slow” way compared to the new way.  While you may not need software with all the bells and whistles, you may find that some version will streamline your workflow, which will save you money in the long-run.  It may even help you make more money because you can get more done!  Some examples include estimating software, CRM (lead and opportunity tracking), time tracking, inventory, reporting, etc.

If you are interested in software that integrates with QuickBooks, here are some links:

Add-ons page

Apps that work with desktop QuickBooks and

Apps that work with QuickBooks Online.

There are also many industry-specific apps that work with QuickBooks and typically do more than one function and they are more in tune with your needs.

Your Books

The most successful companies invest in accounting technology, accurate bookkeeping, thorough reporting, tax minimization, and professional consulting.  When business owners cut corners in any of these areas, it usually costs them more money in the long run to clean up the problems that result.   I certainly see this with users who set up poorly (because they didn’t know better) and missed out on tools in QuickBooks to help them get their work done faster.

An up-to-date version of QuickBooks minimizes maintenance and troubleshooting costs.   Making sure the bookkeeping and reconciliations are done properly is essential for compliance reporting (such as payroll and income taxes) and decision-making.  Reports easily accessible help a business owner make smart decisions about running their business, and minimizing taxes helps you keep more of what you make (yeah!!).

Since accountants see thousands of financial reports in their careers, they have developed an eye for opportunities that a business owner may not see.  Bringing an outside perspective into your business is a good investment that can help you discover great opportunities in your business.

Measuring the Payoff

Your accountant can help you measure return on investments in many of these areas. If it involves QuickBooks we can help in a variety of ways – obtain a version of QuickBooks that suits your needs at a great price, customize settings and features to fit your business better, train staff to use it correctly and effectively, streamline your QuickBooks workflow, set up custom reports and more – just ask!

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5 Ways to Lower Overhead Costs

Many focus on saving time out in the field – watching hours spent on jobs, looking for ways to improve productivity.  But how often do you look at saving time in the office?  So often, time on office tasks, time on sales tasks, time spent working on estimates,  (to name a few)  isn’t tracked – perhaps just the total hours worked for the day/week – or not at all for those who are salaried.  But the profit from your jobs needs to cover your overhead and leave you a profit.  So it’s a good idea to review what gets done and see if there is a more efficient way to get the work done. And that leaves you with more profit J.  Here are 5 ways you can lower your overhead costs.

  1. Delete! – How often do you find you’re doing something that no longer needs doing or no longer important? Look around and see if any tasks can be eliminated. Or perhaps there are costs you can eliminate. While auto-pay is a nice feature, it’s easy to forget to review expenses that are paid monthly.  So take a look and see what can be eliminated.
  2. Delegate First, can this task be delegated so you can focus on tasks more in line with your position in the company? If you’re the owner, that could be focusing sales or revising your vision for moving your company forward. In some cases, hiring someone to do lower-level tasks will actually save you money because then you’re free to work on tasks that will help move your business forward – or maybe enable you to work less.  I know this can be tough – I’m guilty of just working on lower level tasks when I should delegate.  I’ve told my assistant she has permission to remind me to let go so I can focus on sales, marketing, and strategizing.  And this is something to review at least once a year if not quarterly – or even monthly if your business is rapidly growing.
  3. Systematize – Many get caught in the trap of “this is how we’ve always done it”. But, have you asked recently if there’s a better way?  Or have you found steps get overlooked?  If you can systematize, you ensure steps don’t get overlooked, thereby preventing problems. This may mean having a checklist or procedure.  In some cases this may mean you can drop a few steps.  It never hurts to review. Perhaps the place to start is what tasks take the longest or which tasks are really critical?  It could be a checklist for hiring – not just the payroll information but perhaps usernames, logins, permissions etc. need to be established. A checklist will keep you on track. I had a client ask earlier this year about a way to streamline their approval process on outgoing invoices – and we found a way that was much more efficient!
  4. Automate – This is one of my favorites! Automating gets tasks done for you, saving you time, money and preventing mistakes from human error. In the case of QuickBooks, it can be monthly, quarterly or even annual charges – automatic bill entry or deductions from bank accounts or charges on credit cards – or even monthly billing to customers if the bill is the same amount every month. A popular one is to automate time entry.  So mobile apps that integrate with QuickBooks save the bookkeeper LOTS of time.  In some cases, automation may mean an initial investment of a tool or software, but the ROI is often big.  So look around, what can be automated? Even lots of little tasks add up.
  1. Training – This is another area that involves investment but can have big pay-offs. Training shortens learning curves, can prevent costly mistakes, and in some cases offer time saving tips and strategies. When working with clients I almost always find mistakes in setup or data entry.  In many cases, features aren’t being utilized either due to not understanding the feature or not even being aware that feature even exists.  That’s true for long-time users as well as “newbies”. And I always find ways to get work done faster; guess that comes from my own impatience with computers ;-).  While I naturally think of QuickBooks training, training is often needed in a variety of areas in your business, including HR (e.g. keeping up with changing regulations), project management, sales and marketing, just to name a few.

So look around. What takes a long time or is costly?  Perhaps there’s a better way or it can be eliminated completely. If you’d like help in reviewing your QuickBooks setup and/or procedures, let us know and we’ll schedule a time to discuss!

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New and Improved Inventory Features for Platinum Enterprise 2020

Over the last few years, Intuit has made a concerted effort to beef up their inventory functionality in Platinum Enterprise and this year is no exception. Check out the new features!

Cycle Counts – (counting inventory in smaller “batches” instead of in entirety).  Cycle Counts make tracking inventory status much more manageable. If you’ve never tried it, I encourage you to check this out! While this isn’t new to 2020, it “sneaked” in during the year in 2019, so many of you may have missed it.  From the menu: Inventory>Cycle Count. Cycle counts can be done via mobile devices if you want.  Just send the selected Items to the mobile devices in the warehouse or wherever you store your inventory.

Alternate Vendors: I know this one is long overdue.  Many of you can buy a product from more than one vendor. In the past there were a variety of work arounds.  Now you can look at an item and see who else you can purchase from if you want to order from someone other than your preferred vendor or compare pricing.

In the Vendor section you’ll now see a tab for Items. You can list the item(s) that you can purchase from the particular vendor and QB will also keep up with the pricing history.

When you’re working on a Purchase Order, you can look up the Vendor’s pricing (see above). You can also look up alternate vendor pricing as shown below

From there, you can see the list of vendors and their pricing as shown below.

Landed Cost – If any of you have to factor freight, duty, import fees or other miscellaneous costs involved with buying inventory, you have had to devise workarounds in QuickBooks (or Excel). Now you can track Landed Costs through the Advanced Inventory feature available in the Platinum version of Enterprise.

  1. Create an Other Current Asset account for Landed Costs (or however you refer to them)
  2. Create an Other Charge Item from QuickBooks to select the freight, etc. and assign it to your landed cost other current asset account
  3. When entering bills, use other charge item for the additional “landed” costs

You’ll see the product cost increase accordingly and then you can adjust sales price as needed.

When you sell the item, you’ll see both the landed cost asset and inventory asset accounts reduced accordingly.

Express Pick Pack –Enterprise keeps beefing up the remote activities for getting inventory sent to customers (i.e. picking, packing and shipping).  In 2019, you could do both PO and SO’s wirelessly but each part of the process involved a different worker; not always efficient. Now you can have one person do both the picking and packing, streamlining your workflow.  Starting from the Sales Order Fulfilment worksheet, you can select to have one or more items express pick/packed.  You can either have these items sent to a mobile device or printed.

Notice there is a new, separate tab for the Express pick-pack so the picker can see all the items/orders in one place and update from that page.

Once done, the worker can update the sales order from the Express pick-pack tab (as shown above).

I would love to hear from those who try out these new features what would think of them!

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