Quickbooks for Contractors: Why You Need to Use Products & Services
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- čas přidán 18. 05. 2023
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One of the most underutilized features of Quickbooks Online is Products/ Services. In this video, I demonstrate why you MUST be using Products/ Services for your construction business.
Check out my end to end Quickbooks Training. www.incomedigs.com/reab ($50 off w/ code CZcams50)
Thank you so much Nick for all the great content; very helpful! Please share the detailed list of products and services. Thank you.
Hi! You can download the import here! www.incomedigs.com/productserviceimport
That was very helpful. Really appreciate it.
Excellent! Glad you enjoyed! Please let me know if there is any specific topic you would like to see next.
Good afternoon coach!!
Hi Nick, I see in this video you mentioned we should map each P&S to an expense account and said how we should split them up to the chart of accounts we think appropriate, while in a different video you mentioned when uploading our chart of accounts they should map them to "Buildable Expense Income" account. Which one do you suggest?
Hey! Thanks for watching! Good question...we are actually talking about two separate "mappings". When uploading our list of Products and Services, we need to indicate which account should be used for 1. Revenue and 2. Expenses
For Revenue...just about everything should go to "Billable Expenses Income" (or a similar, single account). For expenses, we want to map to 1 or a few accounts that help to describe what was being purchased in the P&L. For example: "Construction Materials", Subcontractos, etc.
We go into deep detail on this and more in our end to end course...Builder Books Academy. Definitely check it out! incomedigs.com/bba Use code CZcams50 for $50 off. And of course, don't hesitate to reach out with any additional questions.
@@Incomedigs Thanks so much! That makes a lot of sense. I'll look into that course.
@@Incomedigs Nick what is the difference between the Builder Books and the Bootcamp?
@@user-yw2ke5pw3s HI! Thanks for asking! The bootcamp focuses on everything Real estate investing. That includes rental property investing as well as flipping. Builder Books Academy is more focused on Building. That is, those companies who build and renovate for third parties: remodeling companies, home services etc. We also add in all of the flipping material into Builder Books Academy. So, if you’re a flipper…you‘ll benefit from either. If you don’t serve 3rd parties…meaning you only work on your own properties…the bootcamp is probably better.
@@Incomedigs Thanks Nick. One more question. Does the BBA have basic QBO set up instructions? I am relatively new to the platform.
We already use products and services for I, construction what I really don’t like is that you can’t input a budget by products and services. You can only use general ledger accounts. I think you should be able to input your budget using both products and services tag to a general ledger account. That would be helpful.
Yes! Agreed! However, I think there is a bigger problem w/ QBO Budgets: You cannot span budgets across fiscal years. Every budget is contained to a year...which is obviously not the case for all projects.
But I agree....QBO can do so much for budgets!
I export my QBO data to compare Actuals to a Budget. Obviously not ideal...but the only option I have given the shortcoming you point out.
Can you upload the products and services list, please
You can download here! www.incomedigs.com/productserviceimport
@@Incomedigs This is really helpful. Thank you do much.
Hi Nick. Love your videos but I have a question.
I’m doing a layman’s setup of Quickbooks Online Plus for a flipping business.
I watched your two-part video on “Flips on your P&L or Balance Sheet” about adding a list of P&L accounts to COA and mirroring accounts to Balance Sheet.
Then I watched the video “Why You Need to Use Products & Services” about setting up a list of Products & Services for adding Expenses. This list had Stage categories with subaccounts to match a budget.
I noticed the list of accounts for COGS and Products & Services were very different, which is confusing for me. Can’t all the lists be the same for consistency and simplicity?
Thanks for your help.
Hey! Thanks for watching! Yes! It's likely that I used a different set of Products/ Services just to demonstrate different lists and levels of specificity. I would DEFINITELY only have one list in your books. I apologize for the confusion..I do so much demoing, its hard for me to stay consistent from video to video.
Definitely worth while to check out our end to end course: Real Estate Accounting Bootcamp. We dive deep into products/ services! www.incomedigs.com/reab
16:27 Excel spreadsheet. Do you have training for setting up that?
Yes! We dig into it in our end to end training...Real estate accounting bootcamp: bit.ly/3xaBohM
I bought teh reab3...great so far. The P&S download you provide doesn't have the stages in it. Can I get the list you are talking about in this vid?
Hi! Thanks for watching and for joining us in REAB! We do not include the categories because they cannot be imported. You have to add the category "manually". You can select multiple and then indicate the category directly within QBO.
The stages shown in this video are:
Stage 1: General, Admin, & Misc.
Stage 2: Rough Structure
Stage 3: Exterior
Stage 4: Major Systems
Stage 5: Interior
Stage 6: Final Details
Hey Nick, I have implemented Products and Services for my new build. Love this whole concept! Is there an easy way to notate products and services when categorizing bank transactions without creating an expense first? I am assuming no, but wanted to ask.
I saw your response in another comment. Disregard!
@@jencorb Yes...unfortunately no! This is something QBO needs to add!
I'm sure I'm missing something obvious but how do you recommend categorizing returns (materials, returned deposits, etc.) with this setup? The best I have found is a journal entry debiting bank account, crediting COGS:3. Rehab Costs indicating the "customer" or project under name and getting detailed in the description. However, this shows up as "not specified" in the P&L because you can't specify the product or service. This gives an accurate total COGS but doesn't show the accurate line item amount. Then I match the bank feed to the journal entry. Your advice is much appreciated!
Hi! Thanks for watching...and a good question.
For credit card purchases...its easy. You would simply record a "Credit Card Credit". This operates exactly like an expense...you can use the products and services the same way.
For bank transactions its a little tougher. the method you outline is not bad...but as you allude to, a bit cumbersome. Here is a strategy my students have been liking lately:
Create a "fake" or "phantom" credit card account. Something like "Returns/ Clearing Account". Record any bank returns to this account. This will then show a negative balance on your balance sheet. Then, when the bank transaction hits your bank (a positive amount to your bank account)....simply categorize it to the returns/ clearing account. You get the benefit of capturing the details within the "credit card credit"...and then you offset the balance with the actual refund that hits your bank.
Hope that helps!
@@Incomedigs Thank you very much. This is exactly what I was hoping to do!
I have product and services on my system. I usually use just the catagories option. I activated the Items option on expenses form. But when I did most of the items in P&S did not populate to the items section. Do I have to manually add them
Hi! Thanks for watching. You need to make sure that all the P&S are checked for "I purchase these items". Only items with this checkmark will show up on the list on an expense.
Do you have to enter expenses in manually to be able to map it to a product or service? If it comes through the bank feed I don't see a way to categorize it as a product/service, only to an income statement/balance sheet account. Maybe I'm just missing something?
Hi...thanks for watching! Unfortunately, you are not missing anything. This is a big miss from QBO. For now, we must create the expense manually and then match to the bank feed. In our course, Real Estate Accounting Bootcamp, I go through a strategy where I turn this into a positive. I create a system whereby we can "double check" our expenses by creating them as soon as they are incurred and then "checking" them against the bank feed: www.incomedigs.com/reab2
@@IncomedigsThanks for the reply!
You mention in your video a free download from your website of the cost codes. I was not able to find that link. Can you forward me a copy or direct me it? Thank you.
Yes! Here it is! www.incomedigs.com/chart-of-accounts
Hey. Working on this exactly thing and I’m have trouble setting up the products and services under the stage categories you have. Possible to get some more detail on how to set this up?
Hey There...thanks for watching! This video might provide a bit more insight: czcams.com/video/7tKS4vUH3tM/video.html
Also, our end to end course goes into this process in great detail: www.incomedigs.com/reab2
how are you able to categorize by stages, I've been looking and dont see where i can group by category
When adding each Product/ Service, you have the option to add "Category". Within this category you would add your stages.
Can you provide the a spreadsheet of the stages with the products. I am not sure I know where they all align. I understand that I will not be able to import them in but it will help me understand things better.
@@Incomedigs
@@user-lp9om1bu1e Sure! If you download the rehab property analyzer, you will see all the categories and their associated stages: www.incomedigs.com/rehab-property-analyzer
TLDR: Contractors in the construction industry can utilize QuickBooks Online's products and services feature to accurately track expenses, create detailed profit and loss statements, and improve job costing for successful invoicing and tracking.
00:00 💡 Utilize products and services in QuickBooks Online for accurate job costing and expense tracking in construction businesses.
02:52 🛠 Use QuickBooks Online to track expenses for materials and projects, create separate products and services for construction materials, and avoid a long list of categories for neat and accurate accounting.
06:46 💡 Use QuickBooks Online's products and services feature to add detail to expenses and accurately budget for projects by creating separate lists for materials and subcontractors.
08:52 📊 Contractors need to use the products and services list in Quickbooks to track expenses and keep profit and loss concise.
10:52 📊 Use Quickbooks products and services to categorize expenses and invoices for easier tracking and reporting, ultimately impacting profit and loss.
14:02 💡 Use Quickbooks Products & Services to categorize expenses and link to Builder Trend for organized and detailed profit and loss statements.
15:53 💡 Use products and services cost codes in QuickBooks Online for accurate job costing, data analytics, and successful invoicing and tracking.
17:26 💡 Check out the free resources at incomediggs.com and share your questions or issues with the process.
Yes! Thanks for watching and summarizing!