How do you track project based expenses (itemizing receipts)?

Question

This is really two questions.

1. How to best track costs of a project and compare with budget (what process/software do you use). I think Quickbooks calls this "job costing":

I get a bunch of receipts then need to somehow connect the dots between what the project was estimated at, and what a t-elbow goes to (e.g. flooring, plumbing, appliances, etc..) This seems tedios in general with so many items being bought.  Hoping theres an easier way to track this.

And considering I don't even have a system for tracking, but wondering if Quickbooks is good because of the receipts, and accounting all built in.  I think their online version is pretty stripped down, and besides,  at $40/mo, I'm looking for alternatives.

2. How crazy does it get to do this when you have 2+ rehabs going on at the same time? esp when people are purchasing parts for two houses on a single receipt.  I kinda want to prevent split purchases like that, and maybe setup a unique bank account for each, but that seems to be overkill and a headache.

I looked at MSProject but not sure where it starts/stops with regards to accounting stuff.

Is there an easier way to manage multiple projects?

Manolo D. · Answer

@Eran Greenburg It is a question on habit and how deep the details are really needed. For example, I have accounts on all my suppliers (except for some "convenience" shops), I have a standing instruction where it is illegal to "combine" purchases per project, each project is treated as a separate transaction, every time, all the time, no matter what, no matter when. If it is a "shared" item, say a glue for electrical conduit, it could be chargeable to one project, BUT for anything more than 100, it needs to be separated or equally charged. Like @Aaron McGinnismentioned, QB Premier is your best bet, it has "Class" separation feature where I use 1 "class" per project, and have "trade" accounts, however, I use my Trade for subcontractors, and unfortunately, all my materials are in one place, it is too time consuming for us to trace per trade PLUS per receipt; but to answer this question, your best bet is to input/import all your receipts on excel, have columns like project #, description, qty, unit, unit price, amount, tax, trade, comment. Only excel can do this, well, maybe QB also, you can probably input all line items of the receipt and assign them on per "trade".

Aaron McGinnis · Answer

Problem 1 - This is a question of manual labor. Tracking down to the individual parts is virtually unheard of in construction precisely because it's so tedious and expensive to do it.

Problem 2 - Make people buy things on separate receipts and mark the receipts for each job.

Quickbooks premier is about the best off-the-shelf solution you're going to get without spending huge bucks on a custom program. The most important thing is to get an accountant involved in setting up your chart of accounts and either running the program for you or showing you exactly how to do it.

George P. · Answer

I have more than 2 rentals going at a time and I have tagged each one with the address in quicken property management. even if I buy 5 toilets for 4 houses I can have a single transaction and within the transaction I can tag those 4 houses.  so when I see the report,  it will show that 2 toilets went to one house,  the remaining 3 went to 3 different houses. yet,  it was just a single transaction..

but it requires diligence and you to be on top of it daily or at least weekly.

I also try to buy materials for just one house at a time but doesn't always work that way, as we know

Aaron McGinnis · Answer

Things like tile, doors, windows, and other finishing items we typically call "Construction Fixtures" in the bids and aren't buying from a big box store (Actually... we don't buy much from big box)... we're buying them from special vendors, so it makes it easy to scan down a list of receipts and see where they are.

Also, for construction fixtures, the purchase needs to be researched before the expense is made. So for tile, if my designer knows our budget is $1,000, she knows not to buy tile in excess of $1,000 unless she's also doing a budget variance.

Dawn Anastasi · Answer

When I buy materials for projects, I may take 1 trip and buy things for several properties at once.  On the receipts I write the property number.  That's how I can itemize everything.  If you have a lot going on at once, it can be difficult unless you really stay on top of it.

Eran Greenburg · Answer

if you can't itemize then how do you know when certain things are over budget so that you can improve the process in future flips? Eg. If tile was budgeted at $1,000 and ended up costing 1500 then you would never know so you couldnt improve that budget for the next flip. This is also useful in determining labor costs per  job within the house , not just materials. For example I could see that actual electrical work  costing x dollars and I would use that to help shop other contractors if needed. We run several houses at a time so comparatively speaking, looking at just one house would be much easier

How do you track project based expenses (itemizing receipts)?

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