180. Avoid These 10 QuickBooks Mistakes - Nate Flake
Oct 2, 2024
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Nate Flake, Senior Partner Development Manager at Intuit, explores the common pitfalls contractors face when using QuickBooks, emphasizing the software's potential. The conversation highlights strategic job costing, cash flow management, and the importance of hiring knowledgeable bookkeepers familiar with the construction industry. Flake also shares key tips on expense tracking and the vital role of timely invoicing to avoid cash flow issues. Bob Gauvreau joins in to discuss an upcoming financial controls web class, underscoring the necessity of mastering QuickBooks for business success.
Contractors must properly set up QuickBooks, including customizing their chart of accounts, to ensure accurate financial reporting and management.
Neglecting job costing can lead to significant financial confusion; implementing job codes helps contractors track expenses effectively and enhances profitability.
Deep dives
Effective Financial Controls Web Class
A financial controls web class is being hosted to teach contractors about essential business practices. Key topics include annual budgeting, effective job costing, and managing cash flow to enhance profitability. The session aims to reveal strategies that top contractors in North America use to achieve impressive net profit margins of 15% or more. By participating in this class, attendees will gain critical insights to improve their financial management skills.
Common QuickBooks Mistakes
Contractors often make crucial mistakes when using QuickBooks, such as improper setup, which can lead to inaccurate financial reporting. A significant error involves not customizing the chart of accounts to reflect specific business needs, resulting in future complications. It is essential for contractors to take the time to set up the software correctly from the start to avoid headaches later on. Solutions like creating a tailored chart of accounts can significantly improve their financial accuracy.
Job Costing and Financial Awareness
Neglecting job costing is another prevalent issue among contractors who fail to track project-related expenses effectively. Without a system to manage costs, they lump all earnings into a single category, leading to confusion during tax season. By implementing job codes for customers and projects, contractors can organize their financial data more efficiently. This practice not only aids in accurate reporting but also reflects the true profitability of their projects.
The Importance of Hiring Professionals
Many contractors attempt DIY bookkeeping, which often results in poor record-keeping and significant frustration. Engaging a qualified bookkeeper can alleviate these issues and ensure compliance with financial regulations. It is essential for contractors to recognize the variance in bookkeeping quality and seek professionals who specialize in their industry. By investing in a skilled bookkeeper, contractors can streamline their financial processes and focus on growing their businesses effectively.
Have you ever wanted to better understand how to use QuickBooks effectively but haven’t had the time to really dive into it?
Most contractors are probably in the same boat.
Our anecdotal guess is that north of 85% of our Members use QuickBooks as their bookkeeping software. But there is so much the platform can do, it’s hard to know if you’re using it “right.” Or to its full potential.
So… we thought it would be cool to have someone from QuickBooks come on and teach us how to get the most out of it.
Nate Flake is the Senior Partner Development Manager at Intuit (the makers of Quickbooks) and he also hosts their Constructing Growth Podcast. Today, we’re going to unpack 10 crucial QuickBooks mistakes contractors often make and how to avoid them moving forward.