WSW - Podcast Job Costing #4 - Time Tracking and Payroll
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Welcome to Workshop Wednesday
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Dan DeLong: Oh, welcome everybody to, an abridged or a different type of workshop Wednesday. It's a casual conver, still casual conversations for serious workflows, and still brought to you by school of bookkeeping.com where you can keep learning QuickBooks your way.
However, we're not live, but you're watching this live, [00:01:00] so it's a little bit of a time shift. So we're trying this new thing. And the thing is, that, the goal of what we were, Sean and I were, trying to do here is get through the entire series of, job costing by the end of the year.
So in order to do that, some holidays came into play. And so doing a live workshop on the Wednesday before Thanksgiving is probably not. What we're focused on the Wednesday before Thanksgiving.
Thanksgiving Plans and Workshop Format
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Dan DeLong: Do you have, do you have a big family thing, planned for, Thanksgiving? Shanna?
Shanna Quinn: the last several years, since my sister-in-law and her husband moved back from Colorado, she hosts every Thanksgiving.
So it's been nice, it takes it off my shoulders, but, I always host Christmas, we take turns. How about [00:02:00] you? What are, your plans?
Dan DeLong: Yeah, we're, gonna fly back, home to Pennsylvania. just got here to Florida and gonna, brave the elements, by going, north.
But, it's important to see family, and that's, what we're grateful for is to have, family and friends around. that's what we're gonna do. so that would be really challenging to try to do the workshop. not in the comfort of mine. Closet here that I'm in.
Job Costing Series Overview
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Dan DeLong: So our our topic today is the fourth part of our series of seven in the job costing.
we're grateful and thankful that you're still sticking with us for, these topics.
Payroll and Labor Best Practices
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Dan DeLong: but today we're gonna be talking about payroll and labor and time, and those mappings and those times kinds of best practices in, [00:03:00] job costing. so we're gonna throw up the, question of the day. what are your best practices for handling payroll and job costing?
so as we'll go through some of these topics, put, the, your best practices or concerns or, comments in the comments or chat. and we will be able to respond to them, after the workshop, because we won't be doing this live. so Shanna, you had mentioned a couple times in the, prior sessions that we've had that, most.
would you say the majority of your, clients are, you called them T & M, like time and materials, and, then you mark up those services. Is that pretty much a standard practice for, your business and your clients, or, is that. Does it depend?
Shanna Quinn: It depends. [00:04:00] a lot of our clients, are a mixed pot.
Some are just because we also have some that are in very different areas that have different requirements and all of that, too, so from a building perspective, but maybe even from a tax perspective. so. We've got, a handful that do T & M, which I prefer the most because I do think it put our clients under more pressure to make sure that they're remembering to capture everything.
'cause they obviously are like, I want my, I wanna make sure my money gets paid back. plus that markup. but we also have others that do fixed. We have some that do draws. it, really does vary and it varies based off of the project type.
Dan DeLong: Got it. so do you.
Time Tracking Tools and Integration
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Dan DeLong: Typically find that you're using [00:05:00] the built-in tools inside of QuickBooks?
Or do you, do you venture outside of, the, QuickBooks ecosystem for, time tracking purposes?
Shanna Quinn: Time tracking. We're using mostly all integrated, within QuickBooks, for payroll. We do have several on QuickBooks payroll, but we also have others that we're, we have on that ADP platform.
Dan DeLong: do you find that there is, a.
Pro and con, when it comes to, doing payroll inside of QuickBooks or outside of QuickBooks, when it comes to the, job costing, does that make more work for you? or does it, does it not bother you because you're, getting more out of the things that those kinds of services?
Handling Payroll Inside and Outside QuickBooks
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Shanna Quinn: So the ones that do T & M, I keep them in QuickBooks because of these, the integration and making sure, like I said, that it's capturing everything. [00:06:00] the ones that are not time and material clients, some of them also might be a little bit differently structured, so they might have, some of the states might require them to have some additional benefits that they offer to their employees.
or have different, taxes that maybe QuickBooks doesn't necessarily help out with that ADP does. those are the reasons we have them moved around. But for the majority of our clients that do T & M, we are using their time tracker and we are using their, payroll. For the ease of how everything flows together.
Dan DeLong: Yeah.
And I, as you were talking, a thought occurred, like the things like, that, ADP offers outside of more than just payroll, workers' comp, and those types of things. Does that, Do you find that a service like that [00:07:00] for contractors is, actually a better fit or. you can manage the workers' comp inside of the QuickBooks payroll system, as well what
Shanna Quinn: their workers' comp platform is a little bit more new, I believe, over than what, ADP had.
I also think ADP just has a little bit wider of a reach, with companies from that perspective. and then they also handle a lot of the audits that from the payroll side of stuff. So that's a really huge help because the audits, for some of our clients can be really time consuming based off the state that they might be in and the additional stuff.
So having that extra help that ADP offers by covering that and taking care of that side is a, big benefit to us and to my client from. The fact of accuracy. No human error type.
Dan DeLong: Yeah. Yeah. It certainly is, something [00:08:00] to consider, right? When you're determining, which is the, best way to go?
but what are the challenges of getting time? Entered, that you've experienced over the decades or so that you've been working in this space?
Shanna Quinn: Even the clients that we have that are utilizing ADP payroll, I still have them using the integrated time tracker within, QuickBooks so that it's still easy enough.
So we've got a document that I've built out that is an easy export from ADP. You drop it in the document and it helps us and gives us that journal entry and that pivot, pivot table look, that says here's a journal entry to enter it and how based off of the hours logged at certain jobs and the time tracker, and then what the actual payout and taxes and benefits were for each of the, [00:09:00] employees.
So it would be nice if ADP, and I've talked to them about it a handful of times. if I could easily take, a time sheet and enter it, but it is a completely separate service. and so if I use their time tracker, it probably would be able to break that out for me. But the cost difference for some of my clients and the ease of using their QuickBooks for them that they've been using for the last 10 years or whatever, that's just easier.
Dan DeLong: Yeah, it's always, a balancing it's, it's always act of, adoption and, using, the, system itself and, the increased benefit of using something that might be more integrated. But then, you end up having to teach the workflow to, to the client and their employees.[00:10:00]
And, depending on, their type of employee, that might be a struggle.
Shanna Quinn: Yeah. And field workers, they're, just like, the contractor themselves. They're there to get to the job, and get the job done. They're, and if they switch from doing one thing, maybe they're helping with some framing and then the supervisor is Hey, I need you to go do some job site cleanup or outside, or, I need you to go pick up some material.
They're in their minds. it's not as important for them to remember to clock in and clock out and do all these different things as it is for us and for our clients. they're, they're a foyer, so keeping it simple, keeping it. and so a lot of, we have actually have, I think on B of our clients because of how easy the time tracker is with QuickBooks where they've got old phones that they've just placed at the job site.
And then the e the guys can, [00:11:00] as they come in, just clock in and, so it's an easier sort of process for them and they're not having to download it onto their old phones or remember to do that stuff. And then as they're leaving, the supervisor reviews what they did and just adds note, as needed and all of that kind of stuff.
Dan DeLong: as you were talking, that, talking through that answer, I'm jusenvisioning you
know. A, a a craftsman, a tradesman you know that works mostly with their, hands. Just seeing, a lot of this stuff as, busy work, or you could call it a burden to them.
Which segues nicely to our next question about burden. What is burden, in, terms of job costing?
Shanna Quinn: So
Labor Burden in Job Costing
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Shanna Quinn: Burden being like labor burden, which is the, cost of the employee essentially. So we talked [00:12:00] about, in QuickBooks they have the ability for us to go in and put in what each of the employees is costing us.
And so you're taking into account, the wages you're taking into account, the employer taxes that are paid, benefits, workers' comp, insurance, all of those things are a part of, and if you have overhead. That you're also paying out an overhead meaning, 'cause that's, I think, what the category is in QuickBooks that called, I would refer that to being, some of our clients do like a gas allowance, so that in the paychecks they're doing, $50 every week or whatever it might be.
And so obviously as they're charging that gas gets booked as overhead. 'cause it's not going directly to a job. and so the $50 allowance is considered then to be part of that overhead calculation of determining what the [00:13:00] cost is of that, having employee. And then from there, you, then can use that employee section to then help calculate what you want that billable rate to be.
So now that you know what your actual hourly cost is, to have that employee or labor burden. That's when you can take it to that next step and determine what your billable rate will be for that person.
Subcontractors vs. Internal Employees
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Dan DeLong: And so this really, focuses, when we're, talking about the, burden, this, really talk speaks to the internal employees, as opposed to, subcontractors, right?
Because, it's, real simple to lay all that out, with a subcontractor, because they bill the. The business and then they can then easily, allocate the markup to that.
Shanna Quinn: Right.
Dan DeLong: where the sub subcontractors handling all that other [00:14:00] burden, lifting the burden. So yes,
Shanna Quinn: I would assume that they're taking into account their burden on their end and using that to determine what to bill, our client.
yeah, so subcontractor and materials are basically just handled differently. and, the only thing I will say is that, when it comes to those, the differences of the subcontractor versus the, working with employees, is that one thing I feel like that sometimes that gets overlooked or forgotten about a lot is.
Collecting insurance certificates. and that's a big part of when you start a relationship with the new vendor. and I'm throwing this out there just as a side note, just because I just completed an audit for a client. and, [00:15:00] we, thankfully this time got all of our certificates, from, the vendors.
But if you don't get a certificate from a vendor, then you're. I feel like that gives you some wiggle room to, to negotiate pricing at that point too, or give your client wiggle room to negotiate with that vendor. 'cause then they're covering the cost of having them on the job site during that audit.
Dan DeLong: Is there a specific feature or function in QuickBooks Online Advance that helps with the labor burden? Or is it, do you, just do things manually or does it depend.
Shanna Quinn: definitely. so I believe there's, the functionality has the, it's there, but you have to manually input that information in. So you're adding in, unless they are, the p wages automatically might come over in advance and plus I think we had to manually enter them.
but obviously your overhead, [00:16:00] your insurance per hour. all that kind of stuff, those have to be manually added. but it will track it for you, in the advanced too, which now with that estimate versus actual, it's giving you a lot more information as far as your profitability on your, internal labor,
Dan DeLong: especially, accountants and accounting professionals who have used, QuickBooks Desktop and going to QuickBooks Online.
That has Long been, one of the gripes about the payroll in QuickBooks Desktop and the payroll in QuickBooks Online is that, these job costing functions, are, were far superior in, in desktop because, you put in those hours and you split out the, jobs and the earnings and QuickBooks proportionately in, in QuickBooks desktop, does all of those other things to allocate the job.
Costs appropriately. Not just in the burden, [00:17:00] but in the, all those different expenses to the business as, that, that aren't calculated in the simple of this, of the hours that I worked, or that the employee worked there. because there's more payroll costs that are associated with payroll for that hour that was worked, right?
Yeah. So in, The point I'm making here is that QuickBooks Online payroll is actually made a lot of strides, right? So initially. that was the resistance to moving to QuickBooks online when you're doing, job costing is that payroll is just gonna be a, nightmare to, try to figure out what those true costs actually are.
But now, QuickBooks Online payroll does a lot of these true cost allocations now, and does it, proportionately,
Shanna Quinn: yeah.
Dan DeLong: Have you, Dove into the, those features [00:18:00] and functions as of late.
Shanna Quinn: I've actually, and my going into 2026, I made the decision to take subscription fees out of, my, packaging.
So I've rewritten my contracts. but as part of all of that too, because of the advancements that adv advance, the advanced version has made, I was also going to my clients and saying, we're. The way we are structured internally is we have our, we have our, general fee, our fixed fee for, doing bookkeeping services essentially, and then we have stacked on top of that.
So it's a additional cost. It's CFO is, services are required, it's additional cost. You do profit first with us. and then the same for, if we have a per project fee. So that helped me during COVID when things were going like up, above, [00:19:00] instead of having to constantly revisit contracts, I was like, let's just break it out into a per project need, and that will help cover the true time that we're spending on, spending on doing your job costing the more jobs you're.
Your, you have active is what you'll actually get billed for. And that will help account for, from a financial and time perspective, our additional cost on doing all the extra work. my point of that was to say that, because of the advances that Advance has made, it doesn't work for all of our clients.
'cause we still do have some custom home builders that build on their own lots. so that functionality won't work for them. but we do have others that, this would work wonderful for. And with all the changes that they've started to push out too, that I'm, seeing more and more of this could be something that might have an additional cost because of the difference [00:20:00] of less versus advanced.
but advanced might be able to remove the job reporting that we are exporting and building in QuickBooks or in Google Docs for our clients. So that was part of the push was to say we could use this other product that's now got the sort of services and built in that could work, release us doing the outside, reporting.
the per project being comes down if you move up to, if you move up to your advanced. so we are moving in that direction with several of our clients because of that functionality of the estimate versus actual and the change orders that we can track through it, the customizable stuff. And, now obviously there's more, options within it too because I believe in an advanced time that has the ability, for us to, or QuickBooks has the ability for us to say, for [00:21:00] this labor code, this is the billable rate for this person.
For this billable code for this person. So you could set up multiple ranges of billable rates, for an employee versus it just being the one, which is really cool.
Dan DeLong: when we, talk about the, different layers of complexity as far as figuring out what the, true, what the cost of, of, workers are, right?
The simple one is the, the, subject ma subcontractor, right? Because, they just send a bill and then mark it up and put it on the, put it on the invoice. You've got your costs versus your, revenue to, to. figure out or, see on reports. And then you have the hourly, which they're gonna be doing their hourly rate and their billable rate.
And, but that's gonna flow into internal payroll. What about salaried employees? The, [00:22:00] how does that fit into the mix where they're not necessarily, their time is not, as, as simple as an hour versus. what? They're actually getting paid. How does, salary people fit into the, all of this, mix with job costing?
Shanna Quinn: I'll be a hundred percent honest. The majority of my clients who have, carpenters in the field are not doing salary. They are doing hourly. and so that really hasn't come across now for a. For the supervisors and the project managers, those do have a salary. and what we've done is just determine, we're calculating out the, labor burden in a very slower format based off of them doing 40 hours.
Here's what that billable rate, looks like. it's also higher obviously, and it's a little bit more, [00:23:00] I wanna, it's higher, but it's also a little bit more, Profitable, I feel like, who are our clients, which is why it's not as rare or it's not as common to see a bunch of hours of them working on stuff.
Which is the nice thing about that, being able to have multiple billable rates. because if sometimes I've got a, oh, we've got a client, here's maybe a carpenter is out, and so then the project manager has to fill in. We obviously don't wanna have to bill their client for his rate of a, as a project manager because we had, a carpenter called out sick.
the work still has to get done, but it also is a, the work of a carpenter. so we're, they also wanna bill fairly out. So that's a really, cool function, but we handle it in a, similar way as far as they track their time, they're tracking it to jobs. They also spend more, administrative time.
So it not always all necessarily [00:24:00] on a job site, sometimes it is management of their team. It's the schedule, build out, it's meetings with clients, all of that kind of stuff. And then obviously review and accuracy of the time put in for the jobs, scheduling for subcontractors, all of that kind of stuff.
It is, no, it's still tracked and it's, their time is still clocked. essentially it's just, handled differently from the actually payable side of it. Not really it,
Dan DeLong: and it's just something more to consider and that's why they need a Shanna in their life to, to help them navigate those changes.
and then another. Aspect is this whole idea of unions and things like that where, there's a, there's an outside entity that's dictating, working conditions or, things like that. How does, how do unions fit in, fit into all of this, [00:25:00] nuances of, job cost?
Shanna Quinn: I honestly have not had, any interaction in all of the clients that I support across all of the us.
so I would say, honestly, I guess I just don't really have much of, a reply or feedback. I obviously know that there are unions that are present that represent, I believe there's the carpenter union. It also all depends on the location and where those people are and if they even are a part of that union.
it's probably handled very differently and, I would look at it as probably being a similar sort of way of management as, when we talked about if you've got a client that works [00:26:00] on a government job, and there's prevailing wages and having to have that extra reporting and oversight, I would think that this would be a very similar situation
Dan DeLong: as you, threw out the, term of, prevailing wages.
this,
Certified Payroll and Government Jobs
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Dan DeLong: Other idea or concept of certified payroll? Does that, come into job costing? talk about what that actually is?
Shanna Quinn: Yes. it's definitely just a more complicated, reporting. QuickBooks Desktop, payroll actually does provide that. but QuickBook online does not. The reports that it, spits out also is very as and dependent on what information gets put into it.
So the time is tracked just very differently. We have to use a very specific set of codes, that is put in place [00:27:00] by the government agency of which this job is being operated under. so there's just, there's just more that goes into it. I actually prefer when our clients are not interested in doing government jobs because of the complexity that, that it brings about.
there's great opportunities for some of our clients, but definitely the government
Dan DeLong: working for the government is complicated.
Shanna Quinn: So complicated.
Dan DeLong: Wow. I could hear your eyes roll from here,
Shanna Quinn: right? For everybody. For everyone it comes is more complic. I do think that it, if you can get in with, Just like everyone, just like working with another company, working with certain governments in certain areas and states has proven to not be as difficult. We're a little bit relaxed. I had a client in Florida that did a government job. [00:28:00] we're, we're, our standards are there, the building standards, but they're not different for a government agency job than it is for a residential or true commercial job anywhere else.
So the, Not back then anyways. it just was not made into this massive, complex situation. where the one that I've got in California, who's trying to, who quoted on a, government job, It's just developing into so much that, I am debating if it's something that we wanna support him on, just because of how complex California's kind of making this situation.
Dan DeLong: if those of you that are watching that are not familiar with a lot of the terms that, that Chana threw out through the course of our half hour conversation, if we haven't scared you yet, there is. [00:29:00] There is hope, right?
Introducing B4CG Membership Platform
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Dan DeLong: and the hope that you're bringing to the, to this organization or this, niche of, of accounting professionals is your, B four cg, which is, allowing people who might be interested in learning more about.
This, this niche of, job costing contractors, home builders, special trades, and being able to provide those kinds of services. So talk a little bit about the B for CG and how, how they might be, helped by some of these foreign terms that you're throwing out there and, how they might be helped out.
Shanna Quinn: B four CG came upbound as a way for me to still have, a little bit more, for me to have more input, have more of a reach, than working on client files [00:30:00] myself. So I've supported the contractor industry off and on for the history of my, accounting, career of 25 years. A long time. but, I've loved, I've learned a lot all along my way.
and I've learned a lot more now as an independent accounting professional for the last 10 plus years now of having my own firm. B for CG is a membership platform for independent accounting professionals, and now we are working on an actual firm built out. for meet small and medium sized firms to also enroll, we're, I've put together a massive amount of wonderful resources, including Dan and his School of bookkeeping.
so QuickBooks Education, certification assistance, all that kind of stuff, it's gonna be really amazing. I've put [00:31:00] together a bunch of internal documents for how to run a firm, templates to how to communicate and workflows, but also. I've got a massive growing tech stack, that, I'm putting together, from both a firm ownership standpoint and again, from a support standpoint for your, trade contractor clients.
so just trying to put this community together to provide extra education materials and support. and then there'll be monthly coaching calls as a part of that. and then on the other side, we're also going to be partnering, or we're gonna be assisting in trade business owners that are coming to us and looking for accounting professionals to help support them in their business.
So we're doing a little matchmaking, within that program too. I'm really excited about it.
Dan DeLong: [00:32:00] Yeah, it's gonna, I'm, looking forward to seeing what, what, the coming years are. Do for you, and in this, journey. so appreciate you joining us. if you want more information about the B four cg, I can too many rhyming letters there. I know. I'm
Music: so sorry for me to.
Dan DeLong: For me to say that in, in one fell swoop.
but I'll get it. I'll get it down. but we have the, QR code. You can learn more about that. Whether you're, an accounting professional or a small business. You can choose your own adventure, with Shanna.
Conclusion and Next Workshop Preview
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Dan DeLong: And then next time that we have the, the workshop, live, we will be talking about billing and revenue recognition.
Ooh, very, great. I know now we're talking money coming in. We've been talking about the costing, so now, we want to talk about money coming in. Yeah. so look for, joining us, the next [00:33:00] time. And we hope you have a wonderful Thanksgiving and we'll see you next time on the workshop Wednesday.
Thank
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