QuickBooks for contractors: how we set it up
The books we keep for home service owners run on QuickBooks Online. The field software (ServiceTitan, Jobber or Housecall Pro) sends in the invoices and payments, Gusto or ADP posts payroll, and receipts come in by text. QuickBooks for contractors works when every number has one home: tech labor in cost of goods sold, bigger jobs tracked on their own, and nothing typed twice.
YetiBooks is a bookkeeping firm that works in these tools every day, not a neutral software reviewer.
What we run client books on
| Job | Where it runs | What reaches QuickBooks Online |
|---|---|---|
| Scheduling, estimates, invoices, field payments | ServiceTitan, Jobber or Housecall Pro | Invoices, payments and customers |
| Payroll | Gusto or ADP | Each payroll, with tech labor apart from office pay |
| Receipts | Yeti, by text | The receipt and what the charge was for |
| Bank and cards | Bank feeds | Every transaction, reconciled |
| The books | QuickBooks Online | All of the above |
We work in QuickBooks Online and connect the software you already run, so you don't switch anything to work with us (here's how that works). Each of those field apps has its own QuickBooks Online integration. Yeti texts you about a card charge while it's fresh, and a person checks everything it files.
When an owner asked Brandon Vaughn, who coaches home service owners, what stack to build toward, Brandon listed what his own coatings company ran: Housecall Pro for the jobs, Gusto for HR, QuickBooks Online for the books, and QuickBooks Time for clocking in, because the field app's time clock didn't handle things like overtime the way he needed.
Where the field software fits
The field app is where a job's invoice is born. It pushes that invoice and the payment into QuickBooks Online, and for those two the sync runs one way, from the field app into the books:
- Jobber syncs invoices and payments one way into QuickBooks. An invoice syncs one time, so an edit made after it synced has to be made in both programs (Jobber help).
- Housecall Pro pushes invoices, payments, new customers and new price book items to QuickBooks Online. Each price book item carries an income account, and an item added on the fly lands as generic Sales (Housecall Pro help).
- ServiceTitan applies invoices and payments in QuickBooks Online when it exports them, and sales tax can only be sent from ServiceTitan (ServiceTitan help).
That gives us three rules:
- Fix an invoice where it started. An invoice changed only in QuickBooks stops matching the field app, and the job reports stop agreeing with the books.
- Map the price book to income accounts by service line, such as service calls, installs and maintenance agreements, so the P&L splits revenue the way you run the business.
- Match every card payout. Field payments reach the bank as batched payouts with the fees taken out, so each payout gets matched to the invoices it covers and the fees get booked.
Put your techs in cost of goods sold
Tech wages, the employer payroll taxes on them and their workers' comp go in cost of goods sold, next to materials and subs. Office wages and your own pay stay in overhead. Whether payroll runs in Gusto or ADP, we connect it so it lands that way. Brandon's instruction to owners is blunt:
…I want you to immediately send an email to your bookkeeper and say, hey, I need to take all of my technicians pay and I need to move them up into our COGS line item.
The same month booked both ways shows why (the numbers are an example):
| Line | Techs in overhead | Techs in cost of goods sold |
|---|---|---|
| Revenue | $100,000 | $100,000 |
| Materials and subs | $27,000 | $27,000 |
| Tech wages, taxes and comp | (in overhead) | $30,000 |
| Gross profit | $73,000 (73%) | $43,000 (43%) |
| Overhead | $59,000 | $29,000 |
| Net profit | $14,000 | $14,000 |
Net profit doesn't move. Gross margin, what's left after the labor and materials on the jobs, drops from 73% to 43%, and that's the number you price from. At 73% every job looks rich. At 43% you can see whether your service rate covers the tech in the truck, plus his labor burden.
Setting it up yourself
If you're setting up QuickBooks Online on your own, this order saves rework:
- Get Plus or Advanced, since Projects and class tracking start at those plans (Intuit: projects, Intuit: class tracking).
- Build the accounts first: income by service line, then cost of goods sold for tech wages, tech payroll taxes, materials and subs. The chart of accounts for contractors lays them out.
- Turn on classes for service lines or locations: Settings (the gear) → Account and settings → Advanced → Categories. Turn on Track classes, choose how classes are assigned, and select Save.
- Use Projects for installs and bigger jobs: All apps → Projects → Projects → New project, then enter a name and the customer, and add the job's invoices and expenses to it. A $300 service call doesn't need one; the field app's job report covers it. Job costing covers what to watch.
- Connect the field app and payroll last, once the accounts exist, so the mappings have somewhere to point.
- Flag subs as 1099 vendors with their W-9s, so January is a report. Here are the 1099 rules for paying subs.
If your QuickBooks has techs in overhead and every sale in one Sales account, bring last month's P&L to a free profit call. We clean up books in about two weeks.
When is QuickBooks Online the wrong choice?
When you ask it to run the jobs. QuickBooks keeps the books; it doesn't schedule or dispatch. Brandon ran his own company on Google Calendar and QuickBooks until it was doing nearly $1 million a year:
…our office manager would copy all those Google appointments over into our QuickBooks account and send off the invoices. It was like a hot mess. It was like triple data entry.
He'd put off a CRM to save $200 a month, and the workaround was a huge bottleneck until he bought one.
It's also the wrong choice on Simple Start or Essentials if you want job costing in the books, because Projects and classes aren't there. And it's the wrong setup when someone else holds the file. Whoever keeps your books, it should be a file you can log into yourself. As Brandon told one owner, "You can go and take a look at your financial statements any point in time that you want. You don't have to wait for your accountant to do it."
Common QuickBooks questions
Is QuickBooks good HVAC accounting software?
For the books, yes, when the field software feeds it. It isn't dispatch software: scheduling techs, the price book they quote from and maintenance agreement visits belong in ServiceTitan, Jobber or Housecall Pro, which push the results into QuickBooks Online. Here's how we keep books for HVAC companies.
Which QuickBooks Online plan does a contractor need?
Plus or Advanced, if you want job costing in the books, since Projects and class tracking aren't in Simple Start or Essentials. Intuit's site has the current prices.
Do I have to switch field software to work with you?
No. We work in QuickBooks Online and connect what you already run, like ServiceTitan, Jobber, Housecall Pro, Gusto and ADP.
