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Download the Excel file with the lists from this video:
There are many industries that require special attention when setting up QuickBooks. Architects are right at the top of that list. It’s a very specialized industry with it’s own preset setup available in the QuickBooks setup interview. The choice you are looking for during the initial setup is under industry and it’s called “Architects / Design / Engineers.”
Setting up your item list and your chart of accounts
Of course, if you ask 3 different architects you will get 3 different variations on similar themes as far as how to set up your item list and your chart of accounts. These two lists are at the core of your accounting system so careful attention is required here. It is helpful to know how you want his set up from the beginning.
As far as the chart of accounts, goes I am a fan of leaving that bare and adding what you need as you need it, especially since QuickBooks makes it really easy to add accounts when/as you need them. This can be good and bad. I tell people to avoid creating a lot of accounts. I prefer a nice, simple chart of accounts. If I want the details of an expense account, I can double click from the P&L and total by payee to see a very clear picture of exactly what is in there.
The item list takes a little more thinking. How do I want to use this list? This is the list of “activities” that I am going to bill my client for. If I sold products these would be the products that I sell. As a service based business, I have to think about what best describes what I am selling. How do I want to set this up?
The AIA Guide has you using the “Phases” as the item list. These are very unique to the architecture industry and refer to the phases that a single project goes through:
- 10 Programming / Feasibility
- 20 Existing Construction Review
- 30 Schematics/Planning
- 40 Design Development
- 50 Contract Documents
- 60 Bid/Permit
- 70 Contract Administration
- 80 Additional Service
- 90 Unbillable Time
- 95 Reimbursed Expenses
My preference is to bill based on people’s time. So I like to set up my items based on who is doing the work, because that drives the rate I’m going to bill. For example I might bill $85/hour for a designer, but $150/hour for a project manager. So my list might look something like this:
- Staff Architect
- Construction Administrator
- Expert Witness (hey it happens!)
- Project Designer
- Project Manager
Whichever you prefer, once you have decided, we have to set these items up in QuickBooks. The video for this post will demonstrate step by step how to do this.
When you're finished here, be sure and check out part 2 -