To take the small construction company to the next level of financial success, you must implement cost accounting. These articles are a part of a series designed to illustrate how you implement cost accounting in a small construction business. The first step in this process is design a file structure. This includes creating a project numbering format, identifying classes of construction, and finally developing a phase breakout of your project work.
The key to the software is to properly set up QuickBooks to meet your needs. You lay out a chart of accounting accounts, buckets to dump data into, then identify your classes of work, create the nine phases of costs (QuickBooks uses item numbers) and finally identify the projects.
In construction there is little respect for processing paperwork. Contractors want to build projects, not deal with how paper is managed. But to gain a true understanding of what it costs to build a project and implement cost accounting, the contractor has to process documents in a meaningful way.
Taking a small construction company to the next level of financial success requires implementation of cost accounting. This article is one in a series designed to illustrate how you implement cost accounting in a small construction business. The first step in this process is design a file structure.
