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Level 1

What is the correct way to set up an Item as a General Contractor?

I am a Commercial General contractor.  I use subcontractors for all of the work/jobs I do. When setting up an Item for instance "Plumbing" I use Subcontractor Expense as my expense account and Construction Income for my Income account. Is there a need to set up sub accounts of both Subcontractor Expense and Construction Income for each item ie; Plumbing? Will that allow me to track each item better?

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Best answer December 10, 2018

Best Answers
Level 15

What is the correct way to set up an Item as a General Contractor?

"When setting up an Item for instance "Plumbing" I use Subcontractor Expense as my expense account and Construction Income for my Income account."

That is your Service Item. This is "two Sided." This is Perfect :)

"Is there a need to set up sub accounts of both Subcontractor Expense and Construction Income for each item"

No; the point of using Items is to avoid micro-managing the accounting. Think "financial report vs Operations." You only use the level of detail for the Financial reporting as you need for your Tax forms. You use a level of Items and item Types to meet your Activity and Operational reporting, such as Estimates, Job Profit, payments to supplies for goods and services, etc.

Please see my attachments.

View solution in original post

3 Comments
Level 15

What is the correct way to set up an Item as a General Contractor?

"When setting up an Item for instance "Plumbing" I use Subcontractor Expense as my expense account and Construction Income for my Income account."

That is your Service Item. This is "two Sided." This is Perfect :)

"Is there a need to set up sub accounts of both Subcontractor Expense and Construction Income for each item"

No; the point of using Items is to avoid micro-managing the accounting. Think "financial report vs Operations." You only use the level of detail for the Financial reporting as you need for your Tax forms. You use a level of Items and item Types to meet your Activity and Operational reporting, such as Estimates, Job Profit, payments to supplies for goods and services, etc.

Please see my attachments.

View solution in original post

Level 2

What is the correct way to set up an Item as a General Contractor?

If I use subcontractor, shouldn't the expense be assigned to COGS, not Expense?

Level 1

What is the correct way to set up an Item as a General Contractor?

I am a general contractor as well and trying to set up quickbooks.  When i take a draw/payment from someone do I apply that as construction income or expense income?

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