Setting up QuickBooks Desktop

updated

March 18, 2020

Setting up a New Company File

Setting up Accounts

Setting up Vendors

Setting up Employees

Setting up Customers

Setting up Items

Setting up Payroll Items

 

Setting up a New Company File

If you're starting from the beginning with QuickBooks or starting out a new company file to start integrating with CoConstruct, here are the basic steps you'll want to take:

  1. Once you've installed QuickBooks on your desktop, launch QuickBooks and choose the option for Create a new company > Start Setup.
    • Enter your Business Name
    • Select Industry > Construction General Contractor (unless otherwise applicable)
    • Select the appropriate business type
    • Enter your sales tax number, address and phone number
    • Create Company
  2. Before starting to work in QuickBooks, you'll want to make sure some basic settings are adjusted.  Go to Edit > Preferences and check the following settings:
    • Jobs & Estimates > Company Preferences > "Do you create estimates?": Yes
    • Jobs & Estimates > Company Preferences > "Do you do progress invoicing?": Yes
    • Payments > Company Preferences > un-check "Use Undeposited Funds as a default deposit to account"
    • If you are in a state or area where you must collect sales tax from customers: Sales Tax > Yes > Add sales tax item for each tax you must assess
    • Time & Expenses > Company Preferences > "Do you track time?": Yes

Feel free to go through the other settings and make adjustments as you may want.  The items above are the most typical settings for builders and remodelers and are the basic items needed to take advantage of the integration with CoConstruct.

 

Setting up Accounts

First, you'll want to set up the following accounts (select "Account" > New):

  1. Any bank accounts associated with your company that you'll want to use to accept monies or pay for bills and expenses (these will be a "Bank" type)
  2. Any credit cards associated with your company that you'll want to use to pay for bills and expenses (these will be a "Credit Card" type)
  3. An Accounts Receivable account where any money owed to you by clients will sit on reports until paid (this will be under "Other Account Types" > Accounts Receivable)
  4. An Accounts Payable account where any money you owe to vendors will sit on reports until paid (this will be under "Other Account Types" > Accounts Payable)
  5. Any additional loans or credit accounts that you wish to track as part of your business finances.  You may want to check with your bookkeeper or accountant on the correct way to set up specific other accounts you might have.

If you followed the steps above for setting up your company file, you should already be set up with the basic accounts needed for tracking expenses and income. To verify that you have what you need, you'll first want to determine how you should be tracking money in and out based on your business.

There are two main ways to track these:

  1. Cost of Goods Sold and Expenses vs. Income: Tracking costs in this way will generate a Profit and Loss report for your job costs and overhead company expenses.  Any money you pay out will be realized as expenses and any money you receive from your clients will be realized as income for your company in real time.  This is the most common method of accounting.
  2. Assets vs. Liabilities: Tracking costs in this way will generate a Balance Sheet for your jobs costs.  Any money you pay out will be held on your books as an asset (typically classified as "Work in Progress") and any money you receive from your clients will be held as a liability.  This method of accounting is more common for:
    • Spec Home/Production builders who are financing projects internally. This allows you to offset the liability of the loan you're incurring for the home by tracking purchases as assets.  Once the home is sold, an adjustment would need to be made to the books to move costs over to expenses and offset the income received from the sale.
    • Other instances where you might need more control over what you recognize as income and expenses for a period of time.

If you have questions about which of the above methods you should be utilizing for your business, you'll want to discuss this with your CPA.  You can use our CPA Talking Sheet as a basis for this conversation.

 

Setting up Vendors

To accurately track who you're paying for for job costs, you'll need to set up your vendors in QuickBooks.  Your vendors in QuickBooks will integrate with your Trade Partners in CoConstruct to facilitate the creation of bills from purchase orders.

To set up vendors:

  1. Select "Vendors" from the left hand menu or home screen
  2. Select "New Vendor..." at the top menu
  3. To set up a single entry, select "New Vendor"; select "Add multiple vendors" to copy and paste a list of vendors from Excel
  4. Save when complete.

Setting up Employees

In order to enable your account to push Time Clock entries from CoConstruct to QuickBooks, you'll want to set up your employees in QuickBooks.  These will link to your builder users in CoConstruct for transferring the time information.

To set up employees:

  1. Select "Employees" from the left hand menu or home screen
  2. Select "New Employee..." at the top menu
  3. At a minimum, enter their first and last name.  Any additional information you wish to enter for your company can be set up now also.
  4. Select "OK" to save.

 

Setting up Customers

To accurately track your expenses and income for each project, you'll need to set up your customers in QuickBooks.  Your customers in QuickBooks will integrate with your projects in CoConstruct to facilitate most of the syncing of information.

To set up customers:

  1. Select "Customers" from the left hand menu or home screen
  2. Select "New Customer & Job" > "New Customer"
  3. If you do a lot of repeat business for customers, you can also create a "New Job" under existing customers to track financials for projects separately.
  4. Save when complete.

Setting up Items

Your items in QuickBooks will integrate with your accounting codes in CoConstruct to allow for accurate transfer of information for estimates, bills, time, invoices and payments.  For more information on why we use the "Items List", see Why can't I link CoConstruct to my Chart of Accounts?

Each item in QuickBooks will link to your Chart of Accounts to track both income and expense transactions.  As noted under the "Setting up Accounts" section above, there are a couple of options for how to set this up.

If you don't currently have a set of codes that you're using to track your project costs, feel free to reference the NAHB Accounting Codes attached at the bottom of this article.  The provided spreadsheets are set up for import to QuickBooks Desktop and have some suggested accounts provided.  It's highly recommended that you speak with your bookkeeper or accountant to ensure that these accounts will work for the way you're tracking costs for your business.

To set up items:

  1. Select "Lists" in the top menu bar > "Item List".
  2. At the bottom, select Item > New.
  3. Select the item "Type" - we typically recommend items be set up as a "Service" type.
  4. Enter the Item Name/Number - this will be your accounting code (e.g. "1010 Building Permits).
  5. Make sure the box for "This service is used in assemblies or is performed by a subcontractor or partner" is checked.
  6. Assign both an "Expense Account" and an "Income Account" for the item.
  7. Fill in any other relevant information specific for your business including Tax Codes and Preferred Vendors.
  8. Select "OK" to save.

You can also reference our Help Center article Importing Accounting Codes to QuickBooks for instructions on setting up multiple items from a spreadsheet.

Setting up Payroll Items

Payroll items are used in CoConstruct to differentiate the rates at which your labor costs are represented.  These will link to your "Time Entry Types" within the CoConstruct time clock.

In QuickBooks, these also allow you to pay your employees at different rates for things such as hourly vs. overtime hours or office vs. field work.

To set up payroll items:

  1. Select the "Employees" tab in the top menu bar > Enter Time > Use Weekly Timesheets.
  2. Select an Employee name at the top.
  3. Click into the "Payroll Item" column > select the arrow drop down > Add new.
  4. Select the appropriate options for the wage type and your correct payroll expenses account.
  5. Repeat for any additional payroll items you wish to set up.

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