Paper based accounting....maybe?

[jpierce]

I'm now a one man show, and like many I have always struggled with the accounting and bookkeeping portion of my business.
In the past I have worked as a sub-contractor installing interior millwork as my primary workload. With the change in the economy I have started doing more remodels and repair projects. But I still have no payroll and not many subcontractors to account for.

I'm thinking that it would save me time to step back and really think about stripping down and streamlining my whole system. Quickbooks, estimating programs, mobile web, texts, doo-dads, bells and whistles everywhere! I spend more time trying to learn and implement things than I do using them.

I'm really thinking bare bones paper based is the way to go for my accounting and job costing.
I think many of us have gotten caught up in the whole "buy this software to save time and make more money" mentality.

I guess I'm looking for opinions, book suggestions, and success stories. Whats your simple system? How are you using a bare bones basic system for bookkeeping, and job cost tracking and time tracking?

[David Meiland]

Unthinkable. At minimum you should be using Quickbooks.

[Dick Seibert]

I've been saying that for some time, I ran crews of as many as 25 union carpenters with a Safeguard pegboard system, writing my payrolls Friday morning, doing my bill paying on the first weekend of the month to get them out by the 10th. Estimating nights and weekends, and taking a box full of stuff to my accountant once a year for taxes and bonding statements. Since 90% of the costing stuff was in my head, I could sell a new 5,000 square foot house in the evening in one call, always came in 10% more than I figured no matter what I tried, finally started adding 10% to the bottom line and started making money. Commercial/government/industrial I just delivered plans to all my subs, but most subs just called prices in from the Daily Pacific Builder, so I had to be home on bid opening days before I dashed off with my bid.

The only real improvement I see is Quickbooks online bill payment when I think back to all those hours writing checks by hand, all I do now is post the bills and click a button and they're off. Another real improvement is computerized time clocks, the men log in and out, I read them with my cell phone on Thursdays, come home, dock the cellphone and I've got beautiful colored time cards, rather than those old ratty, coffee and mud stained cards scrawled so I could hardly read them. Online payroll is also a great improvement, no more carrying paychecks to the men, the money is direct deposited into their accounts and paychecks are no-longer an issue, no bank account no employment, cuts down on irresponsible employees. .

[swbuilder]

If you have struggled with the accounting and bookkeeping as you say you are much better off with a computerized system. Less chance with screwing things up than paper system as long as it is set up correctly. I have increased my business knowledge by leeps and bounds learning computerized accounting. Back when we first started we just had a binder with company checks. Accountant kept the books. I was looking at the monthly statements one time and he was still showing houses on the books that he had booked the revenues for sales. Made it look like we were making a ton of money. After I saw that even CPA's could be sloppy with their work i took a really active role in learning the business side of the business.

[Lavrans]

I dunno. 1 man, if you haven't got quickbooks set up already it's not going to save any time or effort until you decide to grow.

But, if you have an accountant, get them to set up QB for you. Then figure out how to download your bank statements directly from the bank to QB.

I think it'll wind up eating more of your time, but will be more accurate. Just so long as you don't expect to invoice from QB unless you're a builder or a retail shop. It will work for remodel and custom work, but not very efficiently.

[Alex_Saloutos]

I don't think the question is paper or computer, whether you're a one man band or a Fortune 500 company, a computerized accounting system will save you time and money.

I think the real question is what is the best use of your time. If you're out in the field making sales or working on a job, what is your time worth? Now, what would it cost you to hire a bookkeeper to handle your work for you? I would think your time is more valuable selling and/or producing.

It sounds like this part of the business doesn't come naturally to you. That's useful information. Too often we delegate what we're good at and try to defy gravity doing what doesn't come easy for us. It's almost a macho thing, "I can do it!"

I'd bet that the quality of your life, your productivity and your income will go up if you have someone on your team that you can delegate this to.

It isn't something you have to do. If you were doing it, you should be paying yourself for that time, which is an expense, and you have the lost opportunity, that is the revenue you could be generating by using that time to sell and/or produce billable work.

It will take you time to find the right person to do this for you, but in the long run it will be most cost effective, allowing you to focus on the areas that you can add the most value. It will probably take less time to find a good bookkeeper than it will be to figure this out on your own.

Try networking with other trades to see if they know any good bookeepers. Also, try finding one with a post on Criagslist.org, it's free.

[Lavrans]

Originally Posted by Alex_Saloutos

I don't think the question is paper or computer, whether you're a one man band or a Fortune 500 company, a computerized accounting system will save you time and money.

I really don't agree with this thought. It's a nice idea, and if you want charts and reports it's true. But for simple accounting for a one man show it's faster to not use computerized systems. It won't be faster until everything can be downloaded straight from the transaction to the computer, but at present that still takes sitting down with receipts and entering almost everything, then downloading bank statements and going back over them and double checking to make sure it all reconciles correctly.

One man show is still going to be no better off or more accurate with an accounting program or a simple ledger. If you've got a book keeper then the accounting programs are faster. If you've got sales people and can make yourself the book keeper, then accounting programs are faster. If not, they take the same amount of time or longer, and the info isn't more useful until you're growing.

Computers don't save paper or time unless you've got the time to devote to them and learn how to use them, and if your time is more profitably spent in the field, then it's not an absolute time saver. For some people the accounting programs can eat up hundreds of hours a year with no positive return on that time.

[David Meiland]

Lavrans, I'm having a hard time agreeing. Maybe you can make things quicker by skipping data entry into a computer, and just hand-write checks using the balance due amounts shown on your statements, but the minute you need to crunch any of the numbers, for any reason, you are screwed if it's all in a paper ledger. There are lots of times when even a one-man band is going to want to add up this category or that, total up costs for a t&m billing, etc. Doing stuff like that with a calculator or adding machine is very time consuming and does not give you any real flexibility to look at your numbers.

The only way I would be in this business without a computer is if I worked strictly for people who paid all the vendors, subs, and employees themselves, and I just ran the job with no involvement in the financials whatsoever.

[Lavrans]

David- what I'm saying is if you're comparing the time needed to learn the system- I have watched people spend hundreds of hours on accounting programs and wind up with nothing more than a balanced checkbook and the data put in so poorly that they can't generate accurate accounts.

IOW, it's fine to get an accounting program, and if you've got plans to grow in a knowable amount of time, then it makes sense. But most people need an accountant to help set up QB for it to be usable, and/or some classes. Unless they are fairly capable with both accounting and computers it doesn't save time until after a significant learning curve.

I don't need an accounting program, I can do all books and billing in a matter of a couple hours a week, definitely less than a day a month. End of year is a day. I can generate any job info I want in about an hour.

[Allan Edwards]

It really depends on the depth of the information you need as to whether you need to computerize or not, as well as the size of your company and the volume of your work. You can be a very small contractor and still handle a pretty sizable amount of money annually, if you need to manipulate data for job costing or other purposes, you really need to computerize. If you are incorporated you have to produce Income Statements and a Balance Sheet. I can’t imagine not using at least a basic program.

[Greg Di]

There are some lightweight accounting solutions out there that aren't, gasp, Intuit products.

I don't know about you guys, but I've about had it with Intuit and their constant upgrade forcing and subsequent bug-filled software releases. Their support is terrible dare you try to use it and it's expensive too.

I'm running QB2007 now and have an online banking issue I can't resolve by myself. It's cheaper to buy 2009 than it is to actually call tech support for which I'm quite positive they'll have no easy solution in their repertoire of Indian tricks to fix.

I haven't been able to download a banking transaction in MONTHS. Talk about a PITA. I haven't balanced my check book since then.

[Lavrans]

Originally Posted by Greg Di

There are some lightweight accounting solutions out there that aren't, gasp, Intuit products.

I don't know about you guys, but I've about had it with Intuit and their constant upgrade forcing and subsequent bug-filled software releases. Their support is terrible dare you try to use it and it's expensive too.

I'm running QB2007 now and have an online banking issue I can't resolve by myself. It's cheaper to buy 2009 than it is to actually call tech support for which I'm quite positive they'll have no easy solution in their repertoire of Indian tricks to fix.

I haven't been able to download a banking transaction in MONTHS. Talk about a PITA. I haven't balanced my check book since then.

I think this is the biggest issue- QB in any form just hasn't been a time-saving program for most of the contractors I know. It works really well for retail businesses that have lots of over the counter transactions, carry a regular amount of stock, etc. But for straight book keeping for small construction I'd say that Quicken is a better product.

I think the "business accounting" software that works for remodel, custom building or handyman type businesses starts at about $600- Intuit's products were not very good (2 years ago), but looks like they are down to $400 +/-.

I can build an excel sheet to do all the book keeping I need, in the formats I like, and that can generate all the reports I would ever need fairly quickly. It still seems like the better programs are upwards of $1.5k still- and that's worth it if you have employees and/or multiple large jobs. Got to admit that for what's available in the sub thousands aren't as good or flexible as an excel sheet- but that's in part because I'm pretty comfortable manipulating computer programs.

What programs are people having an all around GOOD experience with right now?

[David Meiland]

Still using (ahem) QB 2003 and it has been completely stable and dependable. I have a quickie Excel sheet for payroll calcs, and a couple of others for estimating. I wouldn't change to anything else unless I doubled or tripled in size, in which case I'd go to CHS and hopefully a cloud version of it.

Last week I had my annual insurance audit. They have about ten questions that I need to crunch numbers for, and the whole thing takes 15 minutes or less. If I had to deal with that from a paper ledger I'd be fried.

[Dick Seibert]

Originally Posted by Greg

I'm running QB2007 now and have an online banking issue I can't resolve by myself. It's cheaper to buy 2009 than it is to actually call tech support for which I'm quite positive they'll have no easy solution in their repertoire of Indian tricks to fix.

The only reason I use an accounting system is for the online banking function, it use to work great, but Intuit drops support every three years and when they do so does your bank. I was running 2006 (supposedly the program with the most bugs they ever had) and had to upgrade to 2009, it has been a nightmare, every time I try to send off the checks I get a message that says: "Too late to send this payment", after many calls to QuickBooks support, to Wells Fargo's QuickBooks support, and even the three of us on a conference call, I was finally told that I had to adjust the payment time to 5 business days after the day I entered the bill. This caused me not only the nuisance but get extra billings from the bank since you are only allowed to go in a few times per week, and my times were doubled. I finally figured out a work around and sent it to my CPA, a QuickBooks consultant, I copied it below from the E-mail I sent her the other day explaining how I was getting in.

I figured out how to pay bills online using 2009 QuickBooks Pro:
1) Enter bills as normal, date of invoice and date of terms.
2) Pay bills selecting online bill pay
3) Go to Checks at top, scroll to the first one, alter the date to 5 business days from today.
4) Close
5) Go to Checks at top, scroll to the second one, alter the date to 5 Business days from today.
6) Close
7) Etc.
This works and pays the bills the first time in, no more going in, getting rejected, altering, then going in again. A nuisance but it works, so I don't have to pay for multiple transactions.

BTW, as I said before, I agree with Lavrans, the more stuff you do yourself, the more stuff and procedures you memorize, the better off you are, relying on a machine you don't really know what's going on.

[swbuilder]

Originally Posted by Lavrans

What programs are people having an all around GOOD experience with right now?

I never had any nightmare experiences using Quickbooks like some here apparently have had but I did have a few minor issues that caused me to go to the web and online QB forums to try and find an answer with varying results. Calling Intuit tech support would be a last option. By contrast with CHS the phone support might be the first place I would start if I had a problem or question. I think the support and customer service is an advantage of a smaller software company over a large one.