For a contractor, items are used for estimating, invoicing, and tracking job
costs. The way you set up your items depends on multiple factors, primarily
your estimating strategy and the
way you would like to view your job cost reports.
When creating items, remember that the level of
detail in your Item List determines the level of detail in your. More detail gives you more information on
reports, but keep in mind that you may not want to create items for such things
as 2x4's and 16 penny nails. If you do, then the person who enters the
lumber supplier or hardware bills will have to break each item on the bill down
in that fashion, which could become an extremely time-consuming task with a
high margin for error. You might want to keep categories as generic as
possible, keeping in mind that you can type special notes into the item
description field of the estimate.
You will typically create items for job phases. You might also use subitems,
inventory items, or group items.
For examples of how to set up items, choose how you generate estimates:
I generate estimates in QuickBooks
I generate estimates outside of
If you plan to use QuickBooks to create job estimates then you should enter
a standard set of items that you will be using on a routine basis. For example,
let's say you want to set up an estimate template in QuickBooks and you
want that template to remind you to capture all the costs of fees and permits.
You might then want the first section of your Item List to look something like
01 FEES & PERMITS
01.11 Fee – City License
01.12 Fee – Plan check (general)
01.13 Fee – School district
01.14 Fee – Sewer assessment
01.15 Fee – Miscellaneous
01.16 Fee – Environmental health
01.17 Fee – Parking
01.18 Fee – Utilities tie-in
01.21 Permit – Building
01.22 Permit – Demolition
01.23 Permit – Miscellaneous
01.24 Permit – Electric
By listing every fee or permit cost that might happen on a project, you are
helping yourself (or the estimator) to capture all of the costs of a project.
In other words, you are helping to insure that costs don't slip through the
In the example above, you would create both Items (01 Fees & Permits)
and two levels of subitems (01.10 Fees and 01.11 Fee – City License).
If you plan to use an outside estimating program or spreadsheet for detail
estimates and to then bring a summary estimate into QuickBooks, you should set
up your Item List to reflect your standard list of summary estimate phases. For
example, if you use an estimating program that uses the 16 CSI (Construction
Specifications Institute) phases to break down a project into small segments,
then you would set your Item List to reflect those 16 phases.
One example of a partial Item List for a remodeling contractor might look
01 Fees & Permits
02 Site Work
07 Exterior Trim
The partial list above represents a typical list of standard phases for a
remodeling contractor. (Other list items would include HVAC, Electrical,
Insulation, Floors, Painting, Cleanup, Landscaping, Supervision, Finance,
Moisture Protection/Roofing, and so on.) The detail for each of the line items
above are not going to be brought over into QuickBooks, but instead will stay
in the estimate that was created outside of QuickBooks.
You can also have subitems below each item in the list, as shown in the
section on setting up items if you generate estimates in QuickBooks. Your Item
List should represent the level of detail you want to bring into QuickBooks
estimates, which should be the same level of detail you want to see in your job