In this week’s edition of PowerTips, our resident QuickBooks and job cost accounting experts, Judith Miller and Jackie Shaw, provide feedback and advice when considering QuickBooks Online (QBO) for your remodeling business.
Judith Miller’s perspective:
Over the past 18 months more and more Remodelers and R/A members have asked me about QBO; some already use it and hesitate to make the move to the QB Desktop version (QBD), which makes perfect sense. It’s in the cloud, people in different locations can access it without a dedicated server. It looks like it costs less (see Jackie’s analysis on QBO costs below). What’s NOT to like?
Others have recently been persuaded into moving from the Desktop version to QBO by QuickBooks support personnel who offer an update to QBO called “Projects” which promises “An Easy Way to Track Your Projects.” Unfortunately, even this new update doesn’t provide useful reporting.
Over the past six months I’ve worked with a handful of R/A members digging into QBO to test it for the most important functions of job costing. Note: click images below for a larger version.
Reports
The ability to get an estimated vs. actual job cost report showing BOTH anticipated hard costs AND marked up sales price: here’s what it looks like from my desktop version in collapsed version just showing estimated hard costs compared to actual. This is one of the two most useful reports for production management. When expanded you can drill down to the labor / material / trade contractor / other cost types to see the detail of both estimate and actual costs.
Some Options Not Available
In QBO the ability to add BOTH the estimated cost and the marked up sales price is NOT available according to the most recent update information. Here’s the print screen from the Projects section of the program:
Not able to apply Labor Burden
QuickBooks Online doesn’t apply labor burden to the jobs (this image from a March 2017 blog post)
Not on the horizon
Job Costing doesn’t appear to be high on the Intuit priority list (from their Support website)
With the above reasons in mind, I can not recommend the online version of QuickBooks (QBO) at the current time. Sorry, but the DESKTOP version does really good job costing and applies fully burdened labor to items/divisions of work by hours. In my opinion, choose the DESKTOP version and save yourself the pain of “work-arounds.”
Jackie Shaw’s Perspective:
Here are my top 5 reasons NOT to use QuickBooks Online (QBO) in order of importance:
1. Intuit does rolling updates without notice or explanation
Recently, the SOP that I created for a client to enter budgets, QBO’s way of tracking estimates, “broke” after an update. At first she thought it was a glitch because QBO has plenty of those.
When I talked to Pro Advisor support and found out it was an update change I told them they just made it even harder for our R/A Members to use QBO.
2. Did I mention QBO is glitchy?
Your bookkeeper may be entering updating on a form and it does not actually change after saving. Or it looks like the change was not made on the report until the user logs out and log back in. QBO will freeze and slow down to a crawl when your internet connection is fine.
This means less efficient bookkeeping and very frustrated bookkeepers.
3. The reporting capabilities are poor and you cannot create custom reports
Talk about a bummer! You get all your data organized in a database and then you can only create maybe 50% of the reports you can create in QuickBooks Desktop (QBD).
4. The payroll product for QBO should not be used.
QBO payroll add-on creates the expense and liability accounts the app will use. Users have NO ability to change the mapping. This means your bookkeeper has to recode payroll expenses to do job costing and divide wages by department.
I strongly suggest Remodelers and R/A members have payroll processed by a local bookkeeper so you can have easy face-to-face support as needed. Your bookkeeper will still need to enter all the payroll job costs in QBO. For example, I provide my clients with a tailored excel worksheet to make the process easier.
5. It is more expensive
Most Remodeling companies need the version that costs $600/year. QuickBooks Desktop Premier 2018 2-User is currently $550. You can use the QBD version for three years before you have to renew. You pay for QBO annually.
Result: QBD $550 for 3 years, QBO $1800 for three years. What could your business do with an extra $1,300?
Tip: If you are using QBO, you can have your subscription added to an accountants wholesale license. Jackie’s company offers wholesale pricing so her clients save 50%. Result is $550/3 years vs. $900/3 years; great savings but still more than QBD.
One final tip: Look into Right Networks for multi-user mode QBD hosting in the cloud if you want access from anywhere. If users only need to access QBD in single user mode look into QBox. This is a great product similar to Drop Box, created specifically for QBD, and a great set up for collaboration between remote users.
My Summary
I do not suggest QBO because users never know when their process documentation will become obsolete, users are crippled by the lack of reporting and working in the cloud can be a real pain.
QBO normally starts crashing and slows down to a crawl after I work for more than 1.5 hours. What does that mean to your office staff who are working full-time?
IF you insist on using QBO you should have no more than 3 employees in the field (third party payroll entries are a pain), do not plan on field staff growth and use an app that only interfaces with QBO.
What is your experience?
Anyone out there run into similar issues running QBO? Have you discovered work-arounds? Would love to hear some feeback on this.
Thank you to our Associates, and R/A Facilitators, Judith Miller and Jackie Shaw for their help with this important product review and update. Here are their e-mail addresses if you have questions or would like to work with either Judith (jfmiller@remodelservices.com) or Jackie (jackie@gojackieshaw.com).