Gauging Your Financials Wilmington DE

In the fast-paced world of custom installation, most of us wish we could avoid all the hassles of bookkeeping. We just want to sell systems, run wire and hook up all of the gear. We have little interest in spending countless hours keeping track of every miniscule detail. As long as were busy, we must be making money, right?

Wrong. Running a business is like flying an airplane through a storm. If you don't pay attention to your navigational gauges, you will have no idea what your heading is, what your altitude is, and whether you are climbing or falling. Your financial reports are the critical gauges and you need to watch them all of the time.

QuickBooks Pro is a good match for the accounting needs of most installation companies. It is very affordable, relatively easy to use, and has the basic features needed to manage small-business finances. Start by finding an accountant who also uses QuickBooks. This eliminates all double entry from the start.

Accounts
When you first begin using QuickBooks, you will set up your company in the software. There is a preset template for Construction: Trades. This creates the accounts needed for this type of business. Bank account and credit card accounts need to be set up along with opening balances.

Vendors
Enter each supplier and service provider that you work with. Enter every vendor who will send you a bill. This includes suppliers who sell you equipment for resale. They will send you invoices that are entered into your Bills and Payments (Payables).

Payroll
QuickBooks is a great place to handle your payroll. You can enter each employee, their wages and withholding, etc. You should have a bookkeeper or office staff member enter hours worked into timesheets and assign these hours directly to the jobs and customers you are working on. This helps track hours spent on each job.

Invoices
Each job sold is entered into invoices that are sent to your customers. It is easy to bill progressive amounts as your jobs reach various stages of completion. Statements are easy to create to remind clients when bills are due. These are your receivables and you can create reports to see how quickly your customers are paying you.

Unfortunately QuickBooks does a very poor job of managing products that are sold. Creating hundreds or thousands of these Items is a real pain. Inventory Items can force you into a double-entry system where you cannot create an invoice to sell something if the item is not in your inventory. You cant get it into your inventory until you create purchase orders, wait for the shipments to arrive, and then receive them into inventory.

QuickBooks Pro also does a poor job of organizing and searching for products by category, manufacture, supplier, etc. I strongly recommend that micromanaging inventory in QuickBooks is a waste of time ...

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