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Multi-family & Production Home Builders and QuickBooks |
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Production and multi-family builders often assign most client contact to their sales force. This frees up business owners to discover and utilize designs that sell well in the local marketplace, and to focus on cost-effective and efficient production methods.
Like many of the other facets of the construction industry you are constantly at risk for time and cost over-runs and tight gross profit margins. You face the possibilities of high land costs, excess holding costs on land held for construction, and holding costs on unsold homes. To balance those hazards, you need accurate week-to-week job-cost information so that you can:
- Track progress on individual jobs (or buildings) and monitor financial results.
- Keep an eye on changes that impact your profit margin.
- Be in a position to make informed decisions as jobs progress.
If your building projects are being financed, you also will need to provide regular, timely, and accurate reports to your banker – for your entire company, as well as for individual units in order to obtain draws.
But probably the most important benefit of accurate job-cost information is the ability to shape your own financial future. How?
When you are intimately familiar with your job cost numbers, you’ll be able to create more accurate estimates and make smarter pricing decisions.
That’s the real way you can truly make a permanent and lasting change in your bottom line!
- At a minimum, you probably want to use your accounting system to:
- Assign materials, trade contractor, and other production costs to jobs (lots, units, buildings, or common areas).
- If employees work on development, to be able to assign payroll and payroll tax cost for direct labor employees to jobs.
- Report on Estimated vs. Actual results (by job stage) for all lots, units, buildings, or common areas.
- Track (and collect on) Change Orders.
- Perform a variety of basic accounting functions within an integrated accounting system (e.g., Accounts Payable, Credit Card Entry, Write and Print Checks, 1099s, Basic Estimates, etc.).
- Enter land purchases, and track land and construction loan draws, balances and interest.
- Be able to allocate or re-assign costs from buildings to units, from common areas to units, or land acquisitions to units.
- Post accurate information from sales and closings.
- Create a variety of financial reports that will provide information to help run your business more profitably.
- You may wish to utilize more advanced features such as:
- Purchase Orders.
- Budgeting.
- Payroll preparation and related tax filings.
- Recording payments to vendors via financing agents.
- Fixed assets tracking.
- Using QuickBooks® to assign fully burdened labor cost to lots, units, buildings, or common areas.
- Calculating and making Work in Process (capitalized cost of construction) entries.
- Additionally you are probably looking for a system that:
- Can be customized to match the specific way that you do business.
- Can be managed in-house – often by clerical level employees.
- Is reasonably priced, with low or no maintenance fees.
Fortunately, QuickBooks® is an ideal match for most production and multi-family home building companies IF Lists are properly structured and IF bookkeeping staff is trained in various specific aspects of construction, and production and multi-family business accounting and reporting.
Lack of knowledge regarding these crucial accounting and business topics causes numerous errors and frustration, and can cost a business literally hundreds of thousands of dollars in lost revenues and excess cost. But we can help you solve these issues through focused training and, if necessary, by providing additional assistance from qualified accountants and Certified QuickBooks Pro Advisors.
Q. One question that many production and multi-family business owners ask is “Can QuickBooks® handle the volume of business that we are currently producing (or plan to produce)?
A. There are two ways in which QuickBooks® is able to address volume issues associated with the production and multi-family building businesses:
- Most production and multi-family businesses have been segregated into various legal entities (for legal liability purposes). This creates a situation where there may be 2 to 20 (or more) different business entities – each of a fairly reasonable size and with a limited life. Because the financial volume is divided between the companies, no single company overloads QuickBooks® capabilities. And QuickBooks® allows you to set up multiple companies with no additional licensing fees, so there is no additional software cost.
- IF the company is quite large, QuickBooks® Enterprise Solutions (a faster, more powerful version of QuickBooks®) is available. It handles much larger file sizes and versions for up to 5, 10, 15, and 20 users are available to meet the needs of various sizes of companies. Because it looks and acts almost exactly like QuickBooks® Pro and Premier versions, the design and training aspects of Enterprise are nearly identical as for these other versions of QuickBooks®.
With our training services we can provide you with essential basics as well as advanced QuickBooks® applications knowledge for production and multi-family builders. We bring thousands of hours of hands-on QuickBooks® and construction accounting experience to the table in these subjects.
We will help you discover how to build your QuickBooks® system to provide you with the information that you need to make more informed, and more profitable, operating, estimating, and pricing decisions for your production and multi-family building company (or companies).
We offer one-to-one support and consulting services to clients throughout North America, and industry-specific QuickBooks online training seminars as well. |
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