As your construction business grows, you may find it beneficial—or even necessary—to split financial reporting by product type, department or geography. For example, if you have both commercial and residential projects, you probably want to see how the profit shakes out for each of those divisions.
While QuickBooks Online (QBO) offers some flexibility in managing multiple divisions, adding Buildertrend into the mix complicates things. Since Buildertrend doesn’t support dimensional reporting in its integration with QBO, finding an effective solution requires some creativity. Here are three strategies for setting up department or regional divisions while using Buildertrend and QBO together.
Overview
One approach is to set up each department or division as a “Parent Customer” in QBO. Then, each job within that department is added as a “Child” under the Parent Customer. This method allows you to filter reports by each department without the need to manipulate GL accounts directly.
How It Works
In this setup, you’ll assign each department a Parent Customer account, with individual jobs listed as sub-customers (or “Children”) of that Parent. By organizing your customers in this way, you’ll have a structure that allows for department-specific financial reporting in QBO.
Step-by-Step Strategy
• Create Parent Accounts for each department or division, such as “East Coast Operations” or “Commercial Projects.”
• Add Jobs as Child Accounts under the relevant Parent Account in QBO.
• Run Financial Reports filtered to each Parent Customer. This lets you generate reports by department or region.
Pros and Cons
This method is relatively simple and allows for consistent monthly reporting as new jobs are added. However, it won’t provide as much detail as some other options, since all costs will map to a single GL account as specified by Buildertrend’s cost codes.
Overview
If you want costs to reflect in specific department GL accounts, adding journal entries (JEs) monthly can help. This approach works well if you’re willing to put in a bit of extra work at month-end to transfer costs between department-specific GL accounts.
How It Works
In this strategy, you’ll use the Parent/Child customer structure described above to track balances. Then, at the end of each month, you’ll use journal entries to transfer these balances to the appropriate department’s GL accounts.
Step-by-Step Strategy
Pros and Cons
While this approach allows you to assign costs directly to department-specific GL accounts, it does require manual entries every month. It’s more hands-on but provides a clearer division of costs by department or geography in your GL accounts.
Overview
For an automated approach, consider creating unique sets of cost codes for each department in Buildertrend. This method automatically directs job costs to the correct GL accounts based on department, though it’s also the most error-prone and complex.
How It Works
With this setup, each department or division has its own version of cost codes in Buildertrend, all mapped to the appropriate GL accounts in QBO. This eliminates the need for manual journal entries or adjustments in QBO since costs are allocated to the correct GL accounts based on the department-specific cost codes.
Step-by-Step Strategy
Pros and Cons
This approach is the most automated, but it requires rigorous attention to detail. You’ll need to ensure each cost is coded correctly within Buildertrend; otherwise, costs may end up in the wrong GL accounts. Additionally, having multiple versions of cost codes can create a long, potentially unwieldy list, which can increase the likelihood of errors.
Dividing your construction company by department or geography using Buildertrend and QuickBooks Online requires creativity due to the limitations in Buildertrend’s dimensional reporting. By setting up departments as Parent Customers, making monthly journal entries, or using department-specific cost codes, you can achieve the financial clarity needed to track division-specific profitability. Each method comes with trade-offs, so choose the one that best aligns with your company’s workflow and reporting needs.
Whichever approach you choose, these strategies will help you gain greater financial visibility into your operations and make more informed business decisions as your company grows.
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